Merck on the Texas money trail

Texas Governor Rick Perry's plan to turn over the hugely popular Texas Lottery to an outside firm may go sour before he can stand back and reap the budgetary benefits. Most of the money would go to help health care causes --funding a pool to provide health insurance for the uninsured and setting aside $300 million a year for a huge cancer research project. But the Austin American Statesman wonders where the money will end up. Perry's former chief of staff is now a lobbyist with Merck, and the drug firm potentially stands to benefit from the cancer research projects.

Making matters worse, Perry angered state officials this week by suggesting that turning over the state lottery to the private sector would be a "smart move"."Are we not smart enough to run the lottery?" an incensed state legislator replied.

Texas governor proposes lottery selloff

Texas is the latest U.S. state to consider the benefits of lottery privatization, the New York Times reports. In his annual State of the State address this week Governor Rick Perry (R) proposed selling the state's lottery to a private firm. Perry wants to use the proceeds to pay for insurance for the state's 10 million uninsured and to fund cancer research, an area in which Texas is a leader.

According to some estimates, selling the Texas Lottery could raise up to $14 billion. The news of Perry's plan comes the year after Texas Lottery recorded it's best year in history, reporting $3.7 billion in sales. The New York Times notes that New Jersey is also considering a similar plan - along with a proposal to lease the New Jersey turnpike.

Critics in both states are attacking the proposals, arguing that a private firm is unlikely to apply the same degree of oversight as local government and that in the end states are likely to get the worst of the deal. Republican opponents inPublish Texas downplayed the chances that the legislation would pass. "I don't know anybody who is supporting it" said Texas Rep. Warren Chisum, R-Pampa, chairman of the House Appropriations Committee. "I'd give it only a 10 percent chance of passing."

Illinois sell-off raises social policy issues

Illinois has formally opened bidding for the state’s lottery, the New York Times reports. Illinois expects to make as much as $10 billion from the sale. The deadline for bidding ends February 22. The sale would mark the first such privatization in the US, where all lotteries have been state run since the early 20^th century. All of a sudden, even state lottery critics are beginning to see the light. “Taking lotteries out of state hands could raise tricky social policy issues," the Times reports, as private operators will be interested in maximizing revenue with no regard for the "duty of care" exercised by publicly elected officials. We hear you, Illinois: If there's one thing worse that the state being involved in gambling, it's the state not being involved in gambling...

Greek firm eyes Indiana's state jewels

A proposal by Indiana Governor Mitch Daniels to lease the state’s lottery appears to be gaining ground. The Indianapolis Star reports that Greek lottery operator Intralot has expressed an interest in the idea, and that Lottomatica and Scientific Games are also weighing up their options. Backers of Daniels’ plan say leasing the Hoosier Lottery to a private firm would be more efficient than having the state run it and would help ease the state’s budget shortfall. New Jersey and Illinois are also considering leasing their lottery franchises.