A (Higher) Education In Leasing The Hoosier Lottery

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The latest idea to generate revenue for the state by Governor Mitch Daniels is to lease the Hoosier Lottery, in order to pay for a program offering scholarships to Hoosier students coming from families making less than $60,000 per year. But is that a good idea or bad idea?

Governor Daniels isn't alone in wanting to sell off his state's lottery.

Next door in Springfield, Illinois, Governor Rod Blagojevich is proposing the same in order to pay for a badly needed infrastructure construction project in a state that hasn't had a proper budget in years.

Out east in Albany, New York, former Governor Eliot Spitzer proposed selling the New York Lottery, also to benefit the state's higher education system.

This isn't the first time either Illinois nor Indiana has leased off a major piece of government property.

Governor Daniels approved the lease of the Indiana Tollway across the northern corridor of the state, and Governor Blagojevich gave his blessing to the lease of the Chicago Skyway.

But when it comes to leasing the Hoosier Lottery for a scholarship program, what's the verdict?

Bad Idea

Why?

Our Hoosier students need help getting to colleges, especially with Indiana University's tuition rates taking a heavy spike this year. And there's no denial of that idea, by itself, being a good idea.

However, selling off the lottery, rather leasing it to a private organization that is, technically, legally barred from operating a lottery, is a bad idea because it's a very short-sighted move.

Leasing the lottery would not do anything to spur ticket sales. Leasing the lottery won't bring in any new games or opportunities for Hoosiers to win. All leasing the lottery would do is get a company to cut us a really really big check right now...and leave us to cut them an even larger group of checks later.

As a matter of fact, a National Public Radio report says Indiana, and her neighbor, Illinois, could both lose hundreds of millions of dollars in the deal.

Currently, the Hoosier Lottery website says of every dollar you spend on lottery tickets and games, 61 cents gets paid out in prizes, a dime goes to retailers and suppliers, 3 pennies goes to general administrative and advertising costs, and the remaining 26 cents gets returned to the State of Indiana.

In 2006, the Hoosier Lottery brought in a net profit of $189 million dollars. And that's around the level the lottery usually brings in.

But, should the lottery get leased off, that's a lot of money that would go to a private company, instead of back to Hoosiers.

The odds never are good at winning the lottery, but, overall, this looks like a surefire loser.

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