Gambling News by Gambling Headquarters

It is hard to fault Indiana Gov. Mitch Daniels for wanting to improve funding for higher education. Whether privatizing the Hoosier Lottery is the way to accomplish that, however, remains to be seen. It's a complicated proposal. Daniels wants to franchise the lottery for a fixed term. The contractor would be licensed and regulated, just like casinos and racetracks, and would continue current payment levels to the state. In addition, the state would seek an up-front payment and a percentage of the operator's revenue above a certain amount. The current funding levels for police, fire and teachers' pensions as well as motor vehicle excise tax replacement and state and local capital projects would continue. Sixty percent of the amount paid up front would be placed in a permanent endowment, with the interest paying for scholarships that could be forgiven if the student stays in Indiana for three years after graduation. Of course, there are many other strings attached to the scholarships. The remaining 40 percent would be used to attract outstanding faculty to public colleges and universities in the state. Attracting top talent takes money. The plan has distinct benefits, including improving the state's lagging educational attainment level, improving the quality of education and keeping the brightest high school graduates in Indiana. However, there are many questions that need to be asked. The state's funding for higher education hasn't increased at the robust level it ideally should. But the universities and colleges have rapidly increased tuition and fees, citing reasons like the need to attract top talent. With this boost from the privatization of the Hoosier Lottery, what guarantees will be made by the universities' trustees to hold tuition increases low and for how long? Without a guarantee, there's no way to know college costs will be controlled to help students ineligible for the scholarships. And what does this outsourcing proposal mean for controlling the expansion of gambling in Indiana? While the lottery would still be regulated by the state, a pause to reflect on the state's already high reliance on gambling as a revenue source is worthwhile. To what extent would additional products and perhaps marketing efforts be regulated?

What would be the effect on the casino industry? What would be the effect on society?

Why would a private company be able to operate the Hoosier Lottery more efficiently than the state? And if it cannot, and if a gambling expansion is not in the offing, why would privatization make sense?

There are many other questions that need to be addressed. That cannot easily happen if the lottery privatization is rushed through the General Assembly at the same hectic pace as the Indiana Toll Road privatization.