Why Lottery privatization is coming out of the budget

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You may recall that a proposal to privatize the Ohio Lottery snuck into the Senate version of the state budget, thanks to lobbyists for GTECH, a former Lottery vendor, still smarting over the loss of their lucrative contract in 2009. At the time, Speaker Batchelder declared himself “shocked,” and if you know these guys, it takes a lot to shock them.

According to the Dispatch, late last week the Speaker hinted that the provision would not survive conference committee:

This afternoon, House Speaker William G. Batchelder said big issues are unresolved. That included public-construction reform and efforts to privatize the Ohio Lottery and Turnpike.

He said the lottery provision might be removed.

You might wonder what it takes to reject a budget proposal that benefits a prolific campaign contributor like GTECH. After all, charter school profiteer, David Brennan did pretty well in Batchelder’s chamber. Unfortunately, GTECH and proponents of Lottery privatization do not have the law on their side.

From Ohio’s Constitution (§ 15.06):

(A) The General Assembly may authorize an agency of the state to conduct lotteries, to sell rights to participate therein, and to award prizes by chance to participants, provided that the entire net proceeds of any such lottery are paid into a fund of the state treasury that shall consist solely of such proceeds and shall be used solely for the support of elementary, secondary, vocational, and special education programs as determined in appropriations made by the General Assembly.

In other words, only a state agency can run the Lottery. And the Constitution isn’t the only place that says so. The US Department of Justice Office of Legal Counsel issued an opinion memorandum pointing out that Federal law prohibits the promotion and advertisement of lotteries in interstate commerce, but grants an exception for lotteries “conducted by [a] State acting under the authority of State law.”

Meaning, while the State could hire a private company to perform certain functions, it must retain control over all major Lottery decisions, profits and assets. In Illinois, the only state DOJ has approved for such an arrangement, all the collective bargaining arrangements remain in place, as do minority hiring requirements and veto power for the State lottery over all decisions made by the operator. Doesn’t sound quite like what GTECH had in mind when it write a provision to “convert the State Lottery from a state-run entity to a commercially-run enterprise”, nor does it sound remotely worth the 5% of Lottery profits the Senate was reported to be contemplating paying a private operator.

In his remarks, Batchelder took a thinly-veiled swipe at Kasich and his band of lawyers who apparently can’t shoot straight*:

“The governor’s people are excellent, but the quantity of stuff they’ve taken on (is) so great that some of these things may not have adequate definition.”


* And if you think this proposal didn’t originate with the Governor, you’re not paying attention. GTECH lobbyist and privatization author Mike Dawson is partner with Kasich lobbyist/BFF Don Thibault.


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  1. Business money

    Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights & boost their revenue. These so-called “model bills” reach into almost every area of American life and often directly benefit huge corporations. Through ALEC, corporations have “a VOICE and a VOTE” on specific changes to the law that are then proposed in your state.

    Privatization of government run functions is one of their goals.

    Check this site to understand the pre-packaged bills either introduced or recently passed in multiple states: http://www.alecexposed.org/wiki/ALEC_Exposed

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