Friday, October 19, 2007

Arnold Schwarzenegger to Lease State Lottery

Analysts from Wall Street testifying at a State Senate hearing in California on Wednesday said that leasing the California State Lottery could raise enough money to help finance health care reform, but only if lawmakers loosen rules enacted to prevent runaway gambling.

Governor Arnold Schwarzenegger announced proposals last week to generate two billion dollars a year to help pay for universal health insurance by leasing the state's lottery. Many experts feel that one way to make the lottery more attractive to bidders is to allow it to undergo a technological transformation that would include the use of equipment such as video lottery terminals resembling slot machines.

'The less constraints, the higher the value,” said Steve Juarez of JPMorgan Chase.

Juarez and other experts at the informational hearing stated that rolling back restraints in the 23-year-old initiative that authorised the lottery would entice more players and boost the current three billion dollars in annual sales and also the long-term value of the games.

However, Fred Jones, an attorney for Californians Against Gambling Expansion, said any such change would be ‘more like going from bows and arrows to fully automatic weapons’ aimed at the poor. The lottery, he said, is part of the gambling industry that mimics a regressive tax that disproportionately hurts low-income people.

'This is very much a political matter and a very important public policy transaction,' said Kathleen Brown, the former State Treasurer and current Head of West Coast Operations for Wall Street investment firm Goldman Sachs.

No comments: