Governor’s Math Evidently Fuzzy On Lottery Sale
Remember that, during the special session last year and throughout the election cycle, everyone was talking about Governor Perry’s fuzzy math.
Well, now it seems his lottery math is fuzzy, too:
Without additional state money, “there’s a high probability that they would run out of money in 20 or 30 years,” said Philip Cooley, a professor at Trinity University in San Antonio. Aides to Mr. Perry said their numbers were solid.
At the same time, a lottery run by a private company could be more efficient and easier to police than the state-operated system, some analysts and one lottery watchdog said.
Mr. Perry has suggested the state could get $14 billion from the sale of the lottery, and experts interviewed Tuesday said the sale price could be even higher.
“It ought to be a bigger number,” said Jerry Love, chairman of the Texas Society of Certified Public Accountants, after performing a rough valuation of the lottery based on public data.
Under the governor’s proposal, a private company would purchase the right to run the lottery for 40 years. Money from the sale would fund health insurance for half a million low-income adults, as well as a research initiative to find a cure for cancer within 10 years.
According to the governor’s office, the estimated $14 billion upfront payment would make close to $1.26 billion in annual interest, a 9 percent return that would be divided among existing education programs and the new health initiatives. The current lottery program makes close to $1 billion annually – most of which goes toward education.
The 9 percent investment return may be possible, but only if the state is willing to invest aggressively. Stocks have typically returned 10 percent annually over long periods.
“It’s optimistic,” said David Wyss, chief economist of Standard & Poor’s, the Wall Street ratings agency. “Potentially, it’s doable, but only if you’re willing to invest in a relatively risky portfolio.”
Like I’ve said before, the interest from this $14 billion is not that substantial. And, according to the Wall Street guy, it seems as though the state wouldn’t earn nearly what Perry thinks.
Written by Vince Leibowitz
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(On Feb 7th, 2007 at 4:55 pm)
I sold Ohio lottery tickets in Cincinnati when I was in college. Poor people buy the tickets. They’d buy them every day. Sometimes they would consult “dream books.” A person would come in and say that he had a dream about a fish or a goat and would then play the fish or goat number from the dream book.
There was also the “death number.” 769 was if someone had just died. 967 was for a dream in which you had spoken to a dead person. Also popular were the flight numbers and death tolls from airliner crashes.
The Lockerbie Scotland death toll number was 259 for those killed on the plane. If you wished to add people who died on the ground after being hit with wreckage, you would then play 270. Many people played both numbers.
The lottery is a very mean thing for a government to do to its people. Of course doing mean things is consistent with Texas state government. The lottery should not be sold–It should be abolished.