The Iowa Lottery has shown interest in two pieces of federal legislation that would create the licensing and regulatory requirements needed to implement internet gambling in the United States. With many states facing huge budget deficits, one area which they can exploit to generate increased revenue is the lottery.
For a short time late last year, Governor Chet Culver entertained the idea of selling or leasing the state lottery to help cover the giant budget shortfalls that have become common under his administration. The Iowa Lottery currently generates more than $50 million of revenue for the state every year. By selling the lottery, the state would have received a large up-front payment, plus 22% of adjusted gross revenues.
While the idea of selling or leasing the lottery didn’t get very far, it is likely that finding other ways to generate more lottery revenue, like lowering the age requirement, allowing on-line games that take credit and debit cards, and adding a new Mega-Millions game, are all proposals that would have some level of support in the Iowa legislature.
The main proponent of selling the lottery last year was Iowa casino operator Dan Kehl. Kehl, the CEO of Riverside Casino in Riverside, met with Governor Culver on December 9th of 2008 to discuss the lease or sale of the lottery.
While the focus at the time was on Governor Culver and Kehl, according to Culver’s official schedule for December 9, 2008, he also met with Lorne Weil, the Chairman of Scientific Games Corporation along with Kehl. Also present at the meeting was Iowa Democratic operative, Jeff Link, and Culver’s campaign chair and current member of the Board of Regents, Bonnie Campbell.
Scientific Games Corporation currently operates the Iowa Lottery’s service network and is a supplier of instant tickets, systems, and services to lotteries worldwide. According to the Scientific Games Corporation’s website, “The company aggressively develops and delivers bold, innovative online lottery games to provide a heightened gaming experience for players and produce increased revenue for lottery operators with a diverse portfolio of new online game content.”
Last January, House Majority Leader Kevin McCarthy told the media, “There’s been no back door dealings of any kind regarding this proposal [leasing the lottery] and I challenge [Sen. Paul McKinley] to give any proof.”
We now know that Governor Culver met with Dan Kelh and a high ranking official with the Scientific Games Corporation. We also know that Governor Culver and countless Democrats have recieved thousands of dallars in contributions to their campaigns.
How much more proof does one need to figure out that the key ingredients exist to make massive fundamental changes to the Iowa Lottery in order to produce more revenue for the state. Governor Culver and legislative Democrats should come clean about their plans to lower the Lottery’s age requirement, add a new Mega-Millions game, and introduce online lottery games. Iowans were fooled once and were outraged when video slot machines began to show up in gas stations and grocery stores across the state. These new measures are even more predatory and will likely be met with even greater opposition.
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