OPINION
Privatizing Washington’s Lottery is a gamble that won’t pay off
Reasonable minds can disagree as to whether there should even be a state lottery. It was created in 1982 during the last great budget crisis in our state.
As a legislator, I was often convinced the “nuisance value” of a revenue stream the public greatly exaggerates exceeded its actual benefit. If I had a dime for every constituent who believed Washington’s Lottery funded much, if not all, of state government (or at least K-12 education), I would be as rich today as a Powerball winner.
In 2006, I had a bill that would have required any lottery advertisement to state: “Lottery proceeds fund education at a level less than one percent of the total state budget.” It struck a chord with editorial boards, and Washington’s Lottery voluntarily pared back the grandiosity of some of its implied claims about revenue generation.
It’s hard to be a gambling relativist and draw a moral distinction between a scratch ticket and a slot machine. And the state keeps adding games, joining states participating in Mega Millions in 2002 and states participating in Powerball in 2009.
Meanwhile, proceeds get shifted to whatever is the Legislature’s rhetorical commitment du jour. Presently, the “Washington Opportunity Pathways Account” is the beneficiary, which is ironic given that Washington learners are as apt to win the lottery as they are to find educational opportunity in a state hell-bent on cutting every state service, including education, to the bone.
Now it’s the lottery itself on the chopping block. The proposal has been made to privatize it, if that generates more cash.
While it’s commendable to think outside the box in these very challenging times for state government, my hope is this trial balloon pops quickly.
For the state to sponsor gambling is untoward enough. To sublease itself to a private gambling operator, however, is something else entirely.
Consider the most likely private operator: GTECH. This company already partners with the state in its online lottery operations, and provides self-service vending machines. GTECH lobbies in Olympia and contributes handsomely to politicians — a little too handsomely in some places.
After its lobbyist, former Texaslieutenant governor Ben Barnes, became infamous for receiving 4% of annual Texas Lottery proceeds — more than $3 million annually — GTECH bought him out in 1997 (Barnes, incidentally, claimed to have gotten George W. Bush out of service in Vietnam).
The first executive director of the Texas Lottery, Nora Linares, was also fired in 1997 amidst allegations of impropriety. She threatened to sue GTECH for her dismissal, saying she was unaware her boyfriend was working for GTECH for $6,000 a month. She’s now married to him.
When Arizona’s John McCain was a big player in the U.S. Senate on gambling issues, GTECH was at his beck-and-call and hired his closest associates to lobby him. McCain’s 2000 presidential bid was even run by an active GTECH lobbyist.
During a dispute, GTECH’s national sales manager once sent the Arizona lottery director a rotten leg of lamb with a note, “Enjoy.” Suffice it to say, GTECH prevailed — the lottery director lost his job.
According to a July 19, 2006, Texas Department of Public Safety Criminal Intelligence Service report to the Texas Lottery Commission, “GTECH is a very aggressive business entity that has a past history of protecting its contracts by lawsuit or threat of lawsuit and of pursuing new contracts with sometimes questionable actions.” Those actions included questionable payments in foreign countries, including Brazil, to land lottery contracts.
In 2008, GTECH was fined $1.4 million by the District of Columbia for a ticket scam.
All of this is to say that I would sleep better at night knowing that the state maintains full control of Washington’s Lottery and its marketing. It’s not a numbers racket, and the motives of generating revenue for education are pure. Its marketing is done by state workers today. Having an entity like GTECH as an arms-length vendor is one thing; having it substitute for a state agency is quite another. It’s akin to inviting the fox into the henhouse, and another fateful step down our state’s recent union-busting, contracting-out path.
Brendan Williams is a former State Representative from the 22nd Legislative District.