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.