Category Archives: Lottery/Gaming

Editorial: Lawmakers ought to slow down the push to privatize

Source: Joe Hallett, Columbus Dispatch, June 5, 2011

…Well before Kasich’s budget proposed privatizing five state prisons, his best friend, newly minted lobbyist Donald G. Thibaut, and two of the governor’s closest policy advisers, lobbying partners Robert F. Klaffky and Douglas J. Preisse, had signed up the nation’s two largest private prison operators as clients….

…David Brennan, owner of Ohio’s largest operator of charter schools and multimillion-dollar contributor to GOP coffers, dispatched his lobbyist, Tom Needles, to secure an audacious deal. Needles walked away with authority to create a new breed of for-profit charter schools funded by taxpayers with no requirement to report how the public dollars are spent.

Similarly, Klaffky pulled off a sweet deal for one of his clients, William Lager, owner of the state’s largest online charter-school operation and another generous GOP campaign benefactor. Klaffky managed to restore a moratorium on competition for Lager’s private schools, also funded by taxpayers.

Wisely, the adults running the Ohio Senate are poised to undo the magic worked by Needles and Klaffky. That’s not to say the Senate version of the budget bill is bereft of self-interest gambits. It includes language to privatize the Ohio Lottery, written by lawyers for GTECH and delivered by Mike Dawson, who, along with Thibaut, is a lobbyist for the giant foreign-owned firm.

GTECH wants to run the state lottery, proposing to take a percentage of net revenue and pay no state or local taxes, in exchange for a guarantee to provide more money for public schools….

Prisons and Privatization

Source: WCPN, The Sound of Ideas, March 28, 2011

To balance the budget, Governor Kasich has proposed leasing or selling some state-run entities to private enterprise. The state gets cash up-front, but gives up assets. Beyond the quick cash, does privatization benefit the state? We’ll talk Monday about plans to sell off five prisons and to privatize Ohio’s liquor distribution system. And we’ll ask whether Ohio should consider leasing the turnpike or selling off the lottery
Plan for prisons: ODRC talks concerns, statistics on privatizing facilities
Source: John Jarvis, Marion Star, March 27, 2011
Corrections employees ask questions at town hall meeting
Source: Jessica Cuffman, Marion Star, March 27, 2011
Ohio’s new prisons chief pushes reforms
Source: Alan Johnson, The Columbus Dispatch, April 20, 2011
ACLU blasts Kasich prison sale plan
Source: Cindy Leise, Chronicle Telegram, June 23rd, 2011
Kasich Tries to Avoid Arizona’s Mistakes in Ohio Prison Selloff
Source: Mark Niquette, Bloomberg, June 29, 2011
3 to bid on five of state’s prisons
Source: Alan Johnson, Columbus Dispatch, Saturday, July 2, 2011

The Governors’ Garage Sale

Source: Mark Niquette and Jerry Hart, Businessweek, February 24, 2011

To balance budgets, some governors have sold or are considering selling or leasing state assets. Anybody want a bridge? Let’s go shopping

– Garden State Parkway and New Jersey Turnpike Toll Collection
– Ohio Turnpike
– Indiana Toll Road
– Florida I-595 Expansion
– Ohio Lottery
– Ohio Prisons
Booze Business
– Pennsylvania Liquor Stores
– Ohio Liquor Stores
Bridges and Tunnels
– New Goethals Bridge
– Chicago Skyway
– Miami Port Tunnel
Parking Operations
– Los Angeles Garages
– Chicago Meters

2-year, $55.5 billion budget proposal / Kasich cuts spending for schools, governments

Source: Jim Provance, The Blade, March 16, 2011

COLUMBUS — Gov. John Kasich’s proposed $55.5 billion, two-year budget unveiled Tuesday would sell off five state prisons to raise $200 million, cut half a billion from local governments, and privatize the state’s liquor system for a lump sum of $1.2 billion. It would close the Toledo prison camp and merge it with the Toledo Correctional Institution, something that will also happen to three other prison camps across Ohio to save $6.7 million over two years. Mr. Kasich proposed doubling the state’s school-voucher program and eliminating the cap on the number of charter schools, while cutting support for public K-12 schools to reflect the evaporation of one-time federal stimulus dollars….

…Budget Director Tim Keen, however, said the plan does use some of the one-time money from sale of prisons and moving the state’s liquor sales division to the new JobsOhio economic development entity for continuing operating expenses in the first year….The plan does not propose privatizing the Ohio Turnpike or the Ohio Lottery, but he said Tuesday that more privatizations are likely to come. …

…The plan also does not factor in savings from the proposed restrictions on public employee collective bargaining that Republicans are pushing through the General Assembly….

…Mr. Kasich has proposed selling four adult prisons currently in operation, plus the closed Marion Juvenile Correctional Facility. None is in northwest Ohio, but he has proposed closing the prison camp at Toledo Correctional Institution. Two of the adult prisons in northeast Ohio, Lake Erie Correctional Institution and the North Coast Correctional Treatment Facility, are already privately run, but the state owns the buildings. The other two state-owned and run facilities that would go on the auction block are Marion’s North Central and Grafton correctional institutions.
See also:
Kasich administration source says five prisons to be sold in next state budget, turnpike leased
Source: Aaron Marshall, The Plain Dealer, March 14, 2011

Jindal pushes land sale / Lawmakers balk at ‘one-time’ cash for budget

Source: Michelle Millhollon, The Advocate, January 16, 2011

Despite criticism from legislators, Gov. Bobby Jindal said he is moving forward with the possibility of selling state prisons in Allen and Winn parishes. The governor said he also is pursuing the privatization of a state employee health plan to create cash in what is expected to be a financially tight budget year. Jindal said he is having “good conversations” about the ideas, which he first floated last month as a way to resolve a $1.6 billion state budget shortfall. He estimates the prison sales and the health plan privatization would generate $160 million…

…Jindal also suggested selling surplus state land, selling investors a portion of the growth in lottery proceeds and selling state buildings and leasing them back. He said the ideas — coupled with the sale of prisons and the health plan privatization — would whittle away more than half of the shortfall expected in the fiscal year that starts July 1. The question is whether he will propose any or all of them….

Governor-elect John Kasich hints at broader privatization plans as he names his new development chief

Source: Reginald Fields, Plain Dealer, Friday, January 07, 2011

Job development, prisons, the lottery, the Ohio Turnpike. And on Friday, Governor-elect John Kasich hinted that maybe even the state’s control over its liquor sales could be turned over to the highest bidder….The Republican leader’s staff later said that privatizing the Ohio Division of Liquor Control was tossed out as example of what’s been discussed internally but has not yet risen to the level of full consideration as has the lottery, turnpike and prisons. Still, the comment was another peek into just how aggressive Kasich plans to be in turning public agencies and entities over to private companies to help the cash-strapped state make a few dollars. Ohio faces an $8 billion budget shortfall later this year….

…Earlier this week Kasich appointed a new state prisons director, Gary Mohr, a former prison warden and a private prison consultant. Kasich later acknowledged that privatizing more Ohio prisons is highly likely.

And the incoming governor again on Friday talked about leasing the Ohio Turnpike, making it sound like a done deal — if he can get the right price….

As for liquor sales, Ohio is a control state, meaning it is the sole purchaser and distributor of “spirituous liquor” (defined as containing more than 21 percent alcohol). The state decides what gets sold, who sells it and how much it costs. In fiscal 2010, the liquor authority reported a record $743 million in sales of spirituous liquors, and the agency netted a profit of $229 million.
For $1, Kasich hires private help to spur job creation
Source: Mark Niquette, Columbus Dispatch Friday, January 7, 2011
Kasich eyes use of liquor profits to aid JobsOhio
Source: Jim Provance, Blade, March 29, 2011

Gov., Madigan talk about leasing lottery

Source: ABC Local (IL), Tuesday, September 09, 2008 | 6:34 PM

The Illinois House will begin a special session on its capital bill- which would build new roads and bridges- on Wednesday. At issue- how to pay for the multi-billion dollar bill. House Speaker Michael Madigan is going to propose a plan this week that puts terms on Governor Blagojevich’s plan to lease the lottery. Illinois Democrats are under intense pressure- particularly from organized labor- to get a capital spending plan in place as soon as possible. It now appears the warring factions are close to an agreement on how to finance the lion’s share of the $25 billion price tag.

Daniels still wants more from lottery / Governor’s bond-issue plan raises questions

Source: Peter Schnitzler, Indianapolis Business Journal (IN), Sat. September 06 – 2008

Republican Gov. Mitch Daniels’ first attempt to raise $1 billion or more by privatizing the Hoosier Lottery failed in 2007 when Democrats in the Indiana House of Representatives balked. Now, Daniels is building his campaign for re-election in part on another attempt to cash in a huge lottery jackpot.

This time, he’s hedging his bet. In case leasing the Hoosier Lottery outright to a private operator is politically impossible, Daniels is exploring a major bond issue backed by its future revenue. But experts on gambling and finance say the plan remains fraught with uncertainty. For either scenario to be successful, they say, the state would need to substantially increase lottery profits, which have been running between $210 million and $220 million a year.

Turning the Lottery Loose

Source: By JONATHAN WALTERS, Governing, September 2008

There are plenty of ways for states to pull more revenue out of their games. All of them face substantial political hurdles.

With Virginia struggling to pay for such pressing priorities as transportation and education and the legislature exhibiting its traditional lack of appetite for raising taxes, David Poisson, a Democratic member of the House of Delegates, thinks he knows where to find some easy money. There is gold, he says, to be mined in the state’s lagging lottery. If the state would cut the lottery loose to perform to its maximum potential, Poisson thinks it could rake in far more than its flat-line gross revenues of about $1.3 billion in each of the past three years.

But to get the lottery there, Poisson also believes that some entity other than the state needs to be running the games. One idea is to let the private sector — with its proven record of running casinos and other commercial gambling operations — lease the lottery in return for $4 billion to $7 billion in up-front cash. Another is simply to turn the management of the lottery over to a private company to maximize revenues, an approach that Poisson figures would add about 50 percent to the $450 million or so that the lottery has been contributing annually to K-12 education over the past few years.