Prieto, Watson Coleman, Benson, Diegnan & DeAngelo Bill to Require Legislative OK for Lottery Privatization Gets Final Legislative OK

(TRENTON) – Legislation Assembly Democrats Vincent Prieto, Bonnie Watson Coleman, Daniel R. Benson, Patrick J. Diegnan Jr. and Wayne DeAngelo sponsored to require any bid to privatize the state lottery be subject to approval of the state Legislature received final legislative approval when it was approved 23-17 Monday by the Senate.

The bill (A-3614) comes as the Christie administration moves to privatize lottery services, despite numerous questions about the plan and the administration’s refusal to explain the plan to the public at Assembly Budget Committee hearings on the issue.

“The proposal to privatize without public explanation one of our most profitable and well-run assets is troubling,” said Prieto (D-Hudson/Bergen), the Assembly budget chairman. “The Christie administration appears ready to forfeit substantial long-term revenue for a one-shot payment that will also hurt small business owners and risk vital programs for our students, veterans and the disabled. More oversight is clearly needed.”

“Privatization should be reserved for when the government cannot perform that function well on its own,” said Watson Coleman (D-Mercer/Hunterdon). “Yet in this case, it appears that the only one that stands to benefit from this proposal is the company chosen to take over this asset. Legislative oversight is clearly warranted.”

“This plan raises many concerns when it comes to businesses, state oversight and even access to children and teen-agers to online lottery playing,” said Benson (D-Mercer/Middlesex). “As long as we don’t have these answers, then strict oversight is required. More checks and balances is the smart thing to do for taxpayers and economy.”

“Giving the lottery to a private vendor is like killing the goose that laid the golden egg,” said Diegnan (D-Middlesex). “The Lottery generates nearly $1 billion a year to fund education and senior programs. Also, thousands of small business owners in the state rely on lottery sales as an essential element of costumer sales. It’s difficult to rationalize privatization under any circumstances, but it would be irresponsible to go forward with an award when only was bid was submitted.”

“The administration’s plan raises serious questions and requires checks and balances,” said DeAngelo (D-Mercer/Middlesex). “Privatization wasn’t envisioned when the current system was set up, so oversight to protect this valued program and its benefits is paramount. We cannot put the Lottery and its benefits at risk.”

The state established a lottery in 1970 to be operated by the state, with the entire net proceeds dedicated to state institutions and state aid for education.  Under current law, the state Lottery Commission and the Division of State Lottery in the Department of the Treasury administer the lottery in accordance with its constitutional and statutory mission.

The bill would require that a contract between the state and a private entity that provides for the operation of the state Lottery by the private entity must be subject to the approval of the members of the Senate and the General Assembly, by a majority vote of such members in the form of a concurrent resolution. 

Under the bill, such a contract would not be operative unless thusly approved.

The bill was approved 45-29 by the Assembly in January. It now goes to the governor.