Cahill says he's open to privatizing state lottery

So each year over the next 50, the lottery returns would drop 3% due the payment not increasing and inflation doing its thing. That sure sounds wise.

So who do you trust to run the state lottery fairly and honestly? The state or some company who is only interested in bottom line profits?
what a choice.

Why would anyone want to step up to the plate and buy the Mass Lotto for $1 billion, with $900 million annual outlays? Lottery revenues are poised to fall, as gambling in general is taking a major hit. Not only that, opening up the Commonwealth to slots or perhaps even a casino later will only take away more gambler wallet share from the Lotto.

Where to these clowns come up with these numbers?

i agree also and just maybe we can get rid of the state tax if we have this and not to raise the gas tax or tolls also. this help bigtime. from pam in lynn, mass

Give Cahill credit for coming up with more clever ideas than simply raising taxes. And I like this one. The state has no business running a gambling operation.

will tim the treasurer be taking money away from city and towns

Treasurerer Tim is getting way off track here.

I am AGAINST third party companies having ANY part of the lottery.

Why don't the just MANAGE the lottery correctly to begin with?

It's not worth running? Then CLOSE IT.

NO WAY should the state give a private company a MONOPOLY on this.

Cahill at least has an open mind . It is good see someone not afraid to speak out. Refreshing to see someone in poltics stand up for the taxpayers!
He is right on target with the gas tax!

Ok I'm no accountant but doesn't 900 million per year sound significantly less than 4.7 billion per year minus whatever the operating costs and payouts were?

Wish the story would have shown the bottom line profit for the lottery now so a proper comparison could be made.

I think there should be a tax on lottery tickets. You buy a $1 scratch card, you pay 5 cents tax in addition to a 19 cent tax if you drove to buy your lottery ticket

Obama Light

I can't imagine that this is a good idea. 4.7 billions in sales a year now and it could be a lot more in 3-4 years when the economy recovers. This is a cash cow business and we want to give it away for 900 millions a year. Sell a number on a piece of paper is easiest money you can make. Except for the payout, there can't be much overhead in this business, no big union and pension to deal with. Let's carve out the good part and keep the rotten parts. I think this is short sighted. Why don't we privatize money losing entity like MBTA instead?

Wow, I don't think I've seen so many bad ideas in one place at one time.

So let me get this straight: The lottery does $4.7B per year in sales, and we're going to sell it for $1B up front and $900M per year for 50 years? And this is a great deal because if lottery revenues decline (?!?) the private owners will be stuck paying us the $900M?

Oh, and slot machines? Come on - nobody is paying $3B for a slots license in the current climate. If we can find a sucker to pay that kind of money, I'm all for it. I just wouldn't - you know - bet on it.

*For Sale *
All aspects of the State of Massachusetts including but not limited to....
Roads..lottery, Historic gold dome on beacon hill could be converted into condos.

Rather then restructuring the company (employees, pension, department consolidation, pay scale) we will be short sighted and sell anything we can

A contract whereby a company pays the state a fixed amount each year for the next 50 years. This guy is an idiot! Apparently his pay scale isn't affected by year-to-year inflation so he isn't aware that inflation exists. After 10 years of such a contract, the state would be short changed. Who out there voted this bozo into office?

Who would pay that much in this economy and in Massachusetts which is trying to get slot parlors and at some point casinos in to compete with lottery. These guys have no idea how to raise cash in this environment.

Sure, you can just see companies running to get in on this sweet deal. Is the sarcasm bleeding through?

Desperate times call for stupid measures. If the state signs a 50 year lease now with a fixed dollar amount per year, then we are going to get killed with inflation. The only reason any private party is interested in this is if they can get a cut of the revenue. And apparently this plan would give them an ever greater cut of revenue each year. Government should be looking to leave a better future to our children, not a future of an ever declining ability of the state government to support itself.

DON'T DO IT !!!!!!!

I am really not a player. We go to Foxwood maybe 3 times a year. Just for the dinner there and the entertainment. We always have a set amount we will 'donate'. For us it is just like an evening out.
But I do believe, we should have some kind of gambling here in Massachusetts. Why do we have to leave all out hard earned dollars in another state. People who gamble will find a way to gamble, no matter what. So make it easier for them to get rid of their money by opening up gambling here in MA.

I'm not really sure that I understand this. If Cahill let's the Lottery get privatized, he will lose control over a huge base of power. Have we ever had a politician give up some of his power?
Why would he allow this?

Wow. Privatizing the lottery is pretty much the stupidest suggestion I have ever seen. There is no way anything as lucrative as the lottery is going to escape corruption in the private sector. Almost unbelievable that Mr. Cahill could be that naive, isn't it?

"He said one advantage of outsourcing the lottery, which had about $4.7 billion in annual sales in the last fiscal year, would be that the private company would take the risks of potential future sales declines. "

MmmHmm. And just who is going to bail them out if they somehow manage to go belly-up, from, say, mismanagement of funds?

Is Cahill running for Gov.?

I bet Tim has an interest in a company poised to buy the lottery and I bet he isn't doing this for the good of the citizens but rather brokering a deal for someone who is going to kick back money directly to him!

The lottery is just a tax on people who are poor at math.

Finally, a breathe of fresh air for Massachusetts politics. such bold ideas in such dire economic times are exactly what Massachusetts needs in a leader. Ideas that create jobs and generate revenues for the State that are not from a way to high gas tax or toll increase. What a novel thing it is to have a politician looking out for the people whom elected him and not his/her own back pocket.

Sounds to me that casinos are on the way if they see a serious risk of sales decreases for the lottery. That, or they'll open up to more national games like PowerBall.

So in the next 10 20 or 30 years we will be totally owned by China or Japan? And probably be Communist, great idea.

Just run things properly and cut the waste.

Good idea. Now privatize everything else too! Also, get rid of the unions and watch costs drop dramatically as profits and quality of work increase.

RE: "There is no way anything as lucrative as the lottery is going to escape corruption in the private sector."

Wow. You must never read newspapers or watch the news. You think the government lacks corruption? Do you think the government is able to do *anything* better than the private sector? The private sector accomplishes far more than government ever could while using less money and fewer employees.

Cahill is a headline grabbing, short-sighted idiot. I can't believe this guy -- he's supposed to be protecting out money and assets, not giving them away. What next -- will he want to sell our roads, bridges and government buildings to the highest bidder. Why not sell our schools?

The total net profits of the Mass Lottery are reported as a few million over $900mill for the last 6 years. It has 400+ employees, 5 regional offices, and takes in a gross of $4+bill per year.

1) I'm not understanding where $3+bill per year is going when there's only 400 employees and 5 offices

2) I can't understand how $900mill/year makes sense when for the past 6 years the Lottery has netted more than that... and the fixed rate doesn't account for inflation.

3) I'm increasingly flabergasted at government's inability to reduce overall spending. Our government shouldn't be talking about creating ANY new programs, endowments, or any expense. It should be cutting duplicate programs, eliminating unneeded/unproductive positions, and generally adjusting it's expenses to it's current revenue based on the tax rate from 5yrs ago, so that we can decrease taxes to the old rate at some point.... otherwise, we'll just be letting our government creep up to the point of taxing our kids at 80% someday.

4) Why does it seem like these people in high powered public positions are folks who wouldn't have been able to cut it in the private sector.... our State Treasurer's experience is having owned a small business and having been a politician (undergrad degree in Political Science)?!?! Cavanagh (Director of Mass State Lottery) was appointed by Cahill but seems to have a better resume and more appropriate education (Undergrad in Accounting and an MBA)

Run, Tim, run. Finally, a Democratic politician in this state who has fresh ideas. He's making Deval look sillier and sillier by the day.

It is easier for Cahill to critize the Governor's proposal of raising the gas tax than his own stupid proposal of raising money for the State with privatization of the State Lottery. He should be voted out of the office.

Joe Smith = Tim Cahill's mom.

MASS has long been the ultimate in hypocrisy.
Ban horse, dog and slots but run the Lottery.
Legalize gay marrige but remove the chuch and call it "civil unions". At the same time saying the lord's prayer before every state session.
Re-elected Barney Frank.
Simaltaniously raising taxes and cutting services.
Kennedy opposes Cape Wind.
Deval Partrick.

Let face it, this state can't run anything.

Joe Smith said "Finally, a breathe of fresh air for Massachusetts politics."...

Joe, a breadth of fresh air? Are you nuts? Cahill can't do math apparently (and he is the treasurer!).

This is Crazy!

NO, NO, NO!

There is a reason the Massachusetts State Lottery is #1 in sales per capita.
Internal staff watch the market and know when/how to introduce new games/tickets, etc. and can get them set up and deployed quickly and inexpensively. Any outside company is servicing multiple lotteries and requests from Massachusetts will be handled in a queue - 'We'll get to your request after we take care of Florida, Texas and Tennessee'. By then, the opportunity may have passed and the potential profits lost.
The Massachusetts State Lottery operates (and always has) on the smallest % operating budget. If it is privatized, you will see those costs skyrocket and profits decrease.
Previous treasurers have looked at privatizing and realized it didn't make sense (ask Joe Malone).
This is a state organization that is currently bringing in money (very successfully) for the 351 cities and towns of Massachusetts and they all depend on these funds.
Does anyone remember the towns that went bankrupt when Dukakis used the funds for other purposes?
If something isn't broken, don't fix it!

Get rid of him now ! before he has another nightmare, fire Cahill !!!

No Way. A private company would probably mess with the payouts and obviously would not have the people of the state in mind. A lot of people may say that the lottery is those who are poor at math, but that is not always the case. When I play, I know that if I don't win, I am helping the state. If a private company took over the lottery, I would stop playing.

Cape shopper finds Cahills brains in wallet !

Hard to find all the facts in one spot but here's my best attempt:
1) Fiscal 2006 the lottery generated $951.2M available to dole out.
2) The MA lottery pays out a little over 70% of revenues to its winners so $4.5B in revenue would mean $1.35B in profit minus operating costs.
3) Some other quick math: $900M payment in 50 years is worth ~$330M at 2% inflation. For the non-finance people out there, that means the private company's payment of $900M in 50 years would really be worth $330M in purchasing power.

I should think it is obvious, but apparently not to all: Most of the annual $4.7 B revenue goes to pay out winning tickets....

Cahill should be given credit for this proposal. Once the lottery is privatized, it gets the state out of the business of running a gambling operation, and we can also avoid pension and overhead costs for those 400-500 emplyees at the lottery, although I realize they'll likely move to other public jobs - perhaps not all. Then, once the lottery is privatized, why stop there? Do we really want the state running things like Ice Rinks, Turnpikes or, that sacred cow, even colleges? If we could get the state back to providing just the necessary services to enable the pursiit of life liberty and happiness, then we could get things under control. The population of this state would be better served if state government would concerns itself with the necessities, like safety (cops and fireman) paving the roads/bridges, supporting public education at the muncipal level (and perhaps one state university), and public transportation. Never mind the poster child for govenment waste - the Turnpike Authority - that's a topic for another day). These offshoot programs, like the lottery, turnpike, airports, and the umpteen state colleges, have invited the mushrooming of bloated buraucracies that provide services to those in need with the most ineffeicient delivery system possible, and as things like pension and public employee health benefits get factored in, then become a perpetual drain on the taxpayer, greater and greater with the passage of time.

So, good for Cahill,,,,and once he privatizes himself out of a job, he can run for governor, and he'll have had at least one good idea more than the present disappointment in the corner office.

massachusetts peddiling addiction.......no worse than a common drug dealer. why does it seem like every time the state talks about finding revenue it either casinos or a new lotto game

next they will do like california and want to legalize weed so they can sell it.
these politicions have no ideas it always find something to tax

Tim,
You really think lottery sales will drop more than 50%. It is not the case your proposal doesn't make much sense.
Here is an idea. Use the lottery profit to offset the proposed gas tax.

This is a terrible idea.
1. Good luck finding someone who has money, CREDIT MARKET ARE FROZEN REMEMBER
2. How much does the lottery brings to the state every year? That's right we are selling peter to pay paul. Next thing we will be selling the governors office.

Always do what you've always done - always get what you've always got.
You know exactly what that means Mass voters...

Great; private operator is probably AIG using all the bailout money.

A quick clarification -- the $4.7 billion number is gross. It then pays out roughly 74% of that in prize money to players, then operating expenses, then the ~$900 million in excess funds goes to the cities and towns.

Sounds like Cahill is setting himself up for an executive position with a private lottery management firm is this were to go through. It could be worse for the Massachusetts Taxpayers than Cheney's position with Halliburton was for the Federal Government & the Military.
I thought Cahill was a person of integrity, & the notion of him running for Governor in the future had given me some hope, but not anymore. This has cronyism written all over it. Time for Cahill to get back into the Private Sector, sooner rather than later.

"The lottery is just a tax on people who are poor at math.
Posted by J March 4, 09 11:38 AM"

I hear this again and again in different forms. More often than not in the "It's a tax on the dumb" variety. Well, people who think / say that are too dumb to realize the difference between a "tax" for which you don't have a choice, you usually have to pay, and a "chance" for which you do have a choice - you don't have to take it if you choose not to. If you want to play, you have to pay. Now, that said, I make no excuse for the millions of people wasting hundreds of dollars every day on the "number", keno, or scratch cards. I buy one ticket a week, if that, but for some reason, there's always someone playing 50-70 daily numbers tickets in front of me.

Instead of selling off every piece of state real estate or stupid operations, why don't they address the real problem. People in the state need to have the pay scale put back in line and all pension plans reviewed..That is driving the costs through the roof. Duval can ignore it, but he will be a one term governor...

The Lottery was originally devised as a way to reduce the influence of organized crime in Boston while at the same time, directing the profits to education. It was just supposed to put the number runners out of business. It was never intended to be a purveyor of addictive games such as scratch tickets or keno. It was never intended to maximize the take from the poor, the elderly and the uneducated, who make up the vast majority of the heavy Lottery players. This proposal is pure baloney.

Can't anyone in state government see the issue with one-time fire sales as a mechanism to solve the budget crisis?

How about cutting salaries, jobs, and benefits like we do in private industry? How about the state agencies "do more with less" and having our valued state employees "work smarter, not harder"? How about reducing some of the ridiculous spending lawmakers approve every year (the $5 million a year to maintain the 5 acres of the Greenway come to mind right away).

Privatize....No! 400+ jobs = real people and families who are stimulating the economy and not on welf/workfare. Don't be jealous because you don't have a state job. These people(workers) put in their hours on their jobs just like you.
Let someone keep their promised pensions that they worked years to earn.
They privatized some city jobs here in Springfield where I live. The result....
Reduction in wages, benefits, and workers. For whose benefit? City services still suck . Where did the supposed savings go.....only the shadow knows.

THE MOB NEEDS A CUT

Look at this at a different point of view. Your selling your business (current lottery), basically financing them and getting regular payments. Then creating a new business (casinos). Not only are you still getiing money from the old business (even though their profits will be cut in half by casinos), but now your new business is most likely doubling your lotto profits. And for jobs? Do you think that these casinos will give the state more than 400 jobs?

The business of government is the business of government. It cannot be contracted out. The people hired the government to do this job, and that is how it should stay.