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Citizen Action/Illinois calls for open lottery process


Public Interest Organization Cites Billions of Dollars at Stake

CHICAGO – Citizen Action/Illinois is calling on Governor Quinn and state officials to impose the highest of standards in their selection of a private management company to oversee the Illinois Lottery. The state has recently issued a Request for Proposal (RFP) seeking private managers to oversee the Lottery, the state’s fourth largest revenue generator. Bids are due on July 30, 2010.

This is a high-profile decision that is being carefully watched across the country and by other states.

Much is at stake – most importantly, billions of dollars in revenue for public services and education – and it’s critical that lottery and state officials select the best firm for the job without regard to political connections and influence. Illinois can’t afford to engage a company unless that company has demonstrated the highest ethical standards and a history of operational success.

“Citizen Action/Illinois takes special interest in this process since its decision significantly impacts revenue and as a result affects every resident,” said Lynda DeLaforgue, co-director of Citizen Action/Illinois. “Illinois leaders must take a critical eye to their evaluation of prospective companies in order to preserve the credibility of the lottery to both its customers and the public.”

In particular, the public interest organization outlined five key criteria within the RFP that it urges evaluators to consider:

  • Conflicts of Interest. The private manager should be free to negotiate with multiple vendors to secure the best technology at the lowest price in order to increase profits for the benefit of the state and the taxpayers. We encourage the evaluation committee to give serious consideration to proposals that outline a clear and impartial approach for engaging vendors.
  • Social Responsibility. Currently, the Illinois Lottery disproportionately gets its highest per capita sales from low-income consumers. For Illinois to increase its revenue, it will be important to expand beyond minority groups currently being targeted by the Lottery and its vendors. Growing the base of players through lower per capita spend across a broader population will make the lottery less regressive. Bidders should be required to show a proven history of social responsibility in their management of other lotteries is critical.
  • Political Activity. With much at stake – most importantly, billions of crucial dollars for public services – it is critical that the Quinn administration select the best firm for the job without regard to political connections and influence.
  • Performance. A proven history of responsibly growing both revenue and profits over a significant period of time will be critical to securing the right private manager. DeLaforgue notes that the state simply cannot afford to turn its fourth largest source of revenue over to an unproven entity.
  • Employee Relations. Under the law, the new private manager will be required to negotiate an “Employee Use Contract“ with the Department of Revenue to utilize current employees for the administration and operation of the Lottery. Such an agreement must maintain the employees’ current collective bargaining rights and recognize their status as state employees.  Any prospective management firm should be subjected to a comprehensive review of their past employee labor relations record, including their experience and compliance with collective bargaining agreements.

“Whether hiring a private company to manage the Illinois lottery will improve its performance or increase revenue to the state remains to be seen,” said DeLaforgue. “That’s why we urge the Governor and other officials to ensure that the company selected for Illinois demonstrates the highest ethical standards and a solid history of operational success. If it doesn’t, that’s putting Illinois and its residents at financial risk.”

Image used under a Creative Commons license by Flickr user Robert Couse-Baker.