Thursday, October 30, 2008

Virginia Lottery: A Future for the Private Sector?Delegate David Poisson (D)

I must say that I have to give Delegate David Poisson (D) representing the 32nd District up in Loudoun County for finally doing some thinking out of the box regarding State policy. Poisson has recommended taking a hard look at the Virginia Lottery system and determining whether it would be in the Commonwealth's best interest to allow for a transition to the private sector away from government controlled operations.

We have to remember that to a large extent there are many in Virginia who are opposed to the Lottery about as much as they are predatory lending like the debate over all those Payday lending enterprises. I do not think I would be going too far out on a limb by saying most of those lean Democrat in the Commonwealth. In my view they completely dismiss the nature of a free people to make their own determinations and reject personal responsibility for undertaken actions.

Thats what makes Delegate Poisson's proposition that much more interesting. This is a bold step Poisson is taking into the brackish waters that has always politically surrounded the Virginia Lottery. Poisson knows and is willing to admit what we all know and that is that the lottery has not been managed or run to its full potential. Much of that may certainly rest on the shoulders of the General Assembly however, given the restrictions on things like marketing that are placed on the lottery.

In the short, the Virginia Lottery has been a large part of funding for K-12 education throughout the Commonwealth. The issue is just how ashamed some politicians may actually be by such a funding source. Shame is not something we often equate to politics, but no other explaination can be presented for a government that wants to get "some " funding but no "too much" from the endeavor as to be too alarming to constituents. Fact is many see the lottery as nothing more than a voluntary tax paid for by the purchaser and tax revenue generated in such a manner does not sit to well with many in Richmond. Whether they will admit it or not.

The question lies in whether the Virginia Lottery could be run more effectively and efficiently by Government or the Private Sector?

The backdrop to this question is one facing many states. California for example, has sought to "bond" the lottery to pay for programs. States like Florida, West Virginia and oregon have sought to use financial revenue projections from the lottery as collateral for bond offerings. It seems that there quite a few options on the table for the direction to take the lottery, but if the primary goal is to raise revenues and thus raise funding for education certainly a study as proposed by Delegate Poisson is required.

There appear to be two options:

1. to permit the Virginia lottery to be leased by a private entity for the purposes of running and return a annual rate of return based on contractual obligation to the Commonwealth

2. to permit the management of the Lottery be run by the private sector but regulated by the government

#2 strikes me more of the model that failed via Fannie and Freddie and given the current economic climate I doubt that anyone will be convinced that this is the way to go for the Virginia Lottery. #1 probably would make the most sense unless the General Assembly was willing to unleash the Lottery to be able to perform at a higher level.

The issue is not so much demographic, but location. The State could allow for increased outlets throughout the Commonwealth like big box retail. The question is the number of locations which of course would need to be loosened should the Lottery be able to grow substantially. Again, the growth would then benefit education.

How many of us care about education? How many of us want to see more funding for education? Why not use these as the backbone for marketing the Lottery to those Virginians who support its core purpose? Again, Democrats have sterotypically associated themselves as being the pro-education Party so it begs the question why it is they may oppose such expansions of the Lottery. This is why the proposal by Delegate Poisson is so commendable.

We need leaders who are willing to challenge the prevailing winds of politics in order to reach solutions. Those prevailing winds can easily be demonstrated in Delegate Poisson's quote:

"We allow people to play the lottery, but we don't want it to look like anyone is having any fun doing it, so it won't smack of sin"

Well said Sir.

1 comment:

Anonymous said...

Might not be a bad idea frankly to take a look at the Lottery. I have never understood why it is the feel compelled to keep the Lottery harnessed the way they do. I mean they already fought the battle to establish it in the first place so they might as well make the most of its potential. I think the Gneral Assembly should be taking a look at everything possible to increase our rate of return on investment that can be used for programs.