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Maine Lottery Considering Privatization
Maine Lottery Considering Privatization
Many states are now facing serious budget shortfalls and are looking for ways to fill empty state coffers. Raising taxes would be politically unpopular and most politicians are reluctant to raise taxes. Some states are trying to raise additional revenue by boosting the sale of lottery tickets. Some states have installed lottery vending machines and have had some success. Other states are considering the sale of online lottery tickets once federal regulations are clarified. At present many credit card companies will not process lottery related transactions for fear of running afoul of the Justice department and ambitious prosecutors. Illinois and Iowa are both looking into the possibility of online ticket sales.
Some states are considering privatizing their lotteries. Several states already have outside companies operating their lotteries and in most cases the results have been positive. Usually states retain ownership of the lotteries and lottery management firms are responsible for marketing, providing lottery machines, developing new games and selling tickets through lottery retailers. This arrangement can be very lucrative for government and the private operators. Illinois is now talking to several gaming giants about privatizing their lottery.
Maine is another state with serious budget problems and legislators are discussing the privatization of Maine’s state lottery. Maine Governor Baldacci has instructed all state agencies to explore more efficient and cost effective ways to provide services and this includes the state’s lottery. Maine has considered privatizing the lottery in the past but the idea was rejected but serious budget problems is making Maine take another look at privatizing the state’s lottery. Some lawmakers are concerned that while the sale of the lottery may bring a huge onetime payment the state would lose money in the long run. Another concern is that a private lottery operator may decide to change agreements with lottery retailers. Currently the Maine lottery pays more than $16 million dollars annually to lottery retailers providing much needed income for small businesses. Maine Representative Linda Valentino, D-Saco stated, “The lottery is huge for helping small businesses stay in business. I would rather be spreading this money out to small businesses than giving it all to some company that is running the lottery.”
Federal regulations also complicate plans for lottery privatization. Under federal law state lotteries must have government employees in charge of day to day lottery operations. Maine Lottery Director Dan Gwadosky stated, “Many states have looked to find ways to further privatize their operations, but they all have run up against the Justice Department rulings. But they are still looking, and we are still looking.” Some lottery experts believe that if the political climate in Washington shifts after the 2010 elections it could open the door for lottery privatization.
Illinois to Offer Online Lottery Ticket Sales
Illinois to Offer Online Lottery Ticket Sales
A proposal in the Illinois legislature would allow the sale of Illinois state lotto tickets online. The proposal was spurred by lagging lottery ticket sales due to the economy. The move is expected to boost sales but there may be a catch.
Since its passage in 2006 using the most dishonest methods to insure passage, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) has had a lot of unintended consequences. In New Hampshire citizens buying state lotto tickets with a credit card at lotto terminals have found their transactions blocked by their banks due to the vague regulations set forth in the UIGEA.
Even though state lotteries are legal under the law many banks have shown that they will block any transactions they are unsure of. Enforcement of UIGEA was foisted on the banks with no government funding to compensate banks for their new law enforcement responsibilities.
Illinois Senate President, John Cullerton hopes that online lotto ticket sales will increase lottery revenues by as much as $300 million dollars. If financial institutions block transactions revenues will in all likelihood remain flat. The financial industry had predicted that the vague regulations would cause many problems and these are just beginning to surface. These predictions were ignored by the federal government which went ahead and passed UIGEA to pander to a tiny minority of anti gambling activists.
Hopefully the difficulties faced by New Hampshire and Illinois will prompt legislators to take another look at UIGEA. The law has caused many problems among them a dispute now in front of the World Trade Organization between Antigua and the United States and all indications are that the decision will be favorable to Antigua.
Should the Illinois lottery manage to solve the problems of online lottery ticket sales other states may follow and citizens will be able to enjoy the convenience of buying lottery tickets online. Several other states are thinking about allowing the sale of online lottery tickets. Many other states are trying to boost ticket sales and fill empty state coffers. Many states have been hard hit by the current recession and are trying to find original funding solutions.
The technology is already in place for the sale of online lottery tickets. Most players say they would welcome the ability to make an online lottery purchase from their home computers or cell phones. Players could also check state lottery websites for up to date lottery information and news. Several states may implement the sale of online lottery tickets as early as 2010.