Let’s hope lottery history doesn’t repeat itself. State officials have chosen a once-controversial company to provide the information architecture to run the state’s new lottery system under a seven-year, $120 million contract.
Rhode Island-based GTECH Corp. was once notorious for its dirty business practices, which led to one employee’s criminal conviction and the deposing of the company’s top brass in 2000.
GTECH will be required initially to set up 4,000 vendor terminals to dispense tickets, ultimately growing to up to 10,000 terminals during the life of the contract. A competing company, Scientific Games, will provide services for low-tech, non-electronically based scratch-off instant games.
Lottery officials declared themselves delighted with the prices they received for the lottery services, and at least one lawmaker, lottery maven Sen. Steve Cohen, dismissed the idea that GTECH’s past problems should malign the reorganized corporation.
GTECH is an industry leader in lottery services, with over $1 billion in revenue and nearly 5,000 employees. Although primarily focused on the lottery business, GTECH has also diversified into providing transaction processing for financial services companies.
GTECH is full-service, offering all kinds of lottery games, ranging from the six or seven number big-payout games that most people think of when they think lottery, to more rapid-fire kinds of gambling capable of turning any crossroads convenience story into a mini-casino.
Of course, just because the company offers the capacity to engage in instant lottery gambling games doesn’t mean that the state has to authorize them. The ongoing question for the lottery board is how aggressively it wants to market and raise money.
Historically, lottery proceeds tend to tail off over time as consumers get tired of the novelty. States that want to maintain lottery revenues usually look to ways to up the thrill level, which typically means faster, high-adrenaline games.
No help from Nashville on Medicare
In 1965, Nashville’s congressman Richard Fulton cast the deciding vote on the House Ways and Means Committee that cleared the way for establishment of the Medicare program. The current upgrade in the program, though, will have to go forward without any help from Nashville.
U.S. Rep. Jim Cooper joined three of the state’s other four Democrats in voting against the Medicare prescription drug bill. The only Democrat to support the bill was the 4th District’s Lincoln Davis, a conservative first-termer from a competitive district.
The Republican-backed Medicare bill slipped through the House on a 220-215 vote, despite Democratic protests that the bill was being rammed through without sufficient scrutiny and didn’t give elderly people enough relief from a growing problem.
“Much of the good in this bill could be done with much less money,” Cooper says in a press release. “Instead of taking a direct approach to offering seniors affordable medicine, the bill subsidizes intermediaries in the hopes that seniors might benefit as a result. This amounts to tens of billions of dollars of unnecessary corporate welfare.”
All of the state’s GOP representatives supported the bill except Chattanooga’s Zach Wamp, who joined the flat-earth segment of the party in claiming that the legislation represents a massive new government obligation.
While it’s true that the bill represents a massive new government obligation, the decision for the federal government to bear the lion’s share of the cost of health care for the elderly was made long ago, and the coverage of prescription drugs is simply a recognition of a change in the way medicine is practiced.
More TVA bashing looms
Although federal officials insist that the Tennessee Valley Authority is in good financial shape, a recently published report contends that the nation’s largest public utility is closer to bankruptcy than anyone will admit.
The report, by business professors Dennis Logue of the University of Oklahoma and Paul MacAvoy of Yale, argues that many of the assets on TVA’s books are overstated in value, and the agency could face a liquidity crisis within five years. A big chunk of the disparity reflects over $4 billion in values assigned to canceled nuclear projects—carried on the books since the 1970s as projects with “deferred” completions.
Although other analysts disagree with the conclusions, concern about rising electric rates—especially to comply with rising clean air costs—is likely to stir a new round of TVA controversy.
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