Lottery privatization plan in Texas not dead yet, CLC chief predicts

AUSTIN—Even though it could be 2011 before the Texas Legislature reconsiders Gov. Rick Perry’s proposal to lease the lottery, Suzii Paynter of the Texas Christian Life Commission, sees the delay as a temporary reprieve.

Paynter, director of the Baptist General Convention of Texas moral concerns and public policy arm, said a recent news report that the legislature isn’t likely to tackle the idea during its five-month session that starts in January isn’t that reassuring.

“The lottery and casino expansion is never dead,” Paynter said of the prospect that lawmakers won’t immediately take another look at the proposal unveiled in Perry’s 2007 “State of the State” address.

Suzii Paynter

Leasing could generate a $20 billion upfront payment, which Perry wants to invest in programs such as education and a health insurance fund.

Gamble not paying off 

“States have already been in the gambling business and they are losing,” Paynter said. “So, they are going to have an initiative to expand gambling.”

Despite the lull in the lottery-leasing plan, the CLC director foresees attempts in 2009 to expand bingo and other games used to generate funds for charity. She also expects a push to expand lottery options into more “instant winner” games and other lures to offset a slight drop in sales this year.

Paynter said the push to privatize the lottery is an attempt to monetize it by gambling on future earnings. However, she said investment banks—such as Lehman Brothers, UBS and Morgan Chase—that have promoted these deals are having their own financial problems, emphasizing the risky nature of the proposal.

“That whole deregulation and monetization didn’t reason with our senses very well,” she said of anti-gambling activists who opposed the move in the first round of legislative hearings.

Predatory plans 

“People had a lot of questions. Senators said, ‘Do you mean (private operators) could sell tickets in student unions?’ It sounded pretty predatory.”

Another source of opposition stemmed from the exploitation of addictive behavior that privatization represents, Paynter said. The idea of someone wanting to take others’ weakness and make a fortune off it is “chilling” and foreign to the role of a government that ought to protect its citizens, she said.

However, Paynter said when she questioned an investment banker about this kind of opportunistic action, he replied that his firm was neutral on that issue. 

“What they’re saying is they don’t care if it creates more addicts,” Paynter said. “They just want to make their 7 percent or whatever on the transaction.”

In addition, Paynter opposes privatization because of the nation’s financial crisis, saying the state should be promoting thrift instead of more gambling and debt. Growth, investment and generosity toward others are the principles Texans should be pursuing, she stressed.

Paynter is interested in learning about a federal agency’s proposal to redirect lottery machinery toward encouraging people to save money.

“This is a values decision,” Paynter said. “We plan to discuss it with state officials. We need to examine how we could use lottery equipment to get people to save for the future rather than creating debt.”

She thinks the crisis on Wall Street that led to the multi-billion-dollar federal bailout may prompt further reflection on ways to reverse the status of our debt-laden culture: “I hope people are revisiting some stronger values.”