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Originally published December 15, 2011 at 6:44 PM | Page modified December 15, 2011 at 6:44 PM

Gregoire proposes privatizing the state lottery

Gov. Chris Gregoire on Thursday floated the idea of privatizing the state lottery system as a way to bring in more money for education.

Seattle Times Olympia bureau

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OLYMPIA — Gov. Chris Gregoire on Thursday floated the idea of privatizing the state lottery system as a way to bring in more money for education.

"I want to be clear: I am not proposing that the lottery expand gambling," Gregoire said at a news conference. "Private-sector operation of the lottery would be the lottery that we have today."

She wants the Legislature to approve having the lottery solicit proposals from private vendors to run the operation.

The idea would be to see if the private sector could operate the lottery's various games more efficiently and earn more money for the state.

"This would allow the private sector to show us if they can in fact do a better job," she said. "The state's role would be to provide oversight."

The Washington Federation of State Employees, which represents 37 district sales representatives who work for the lottery, said it's a bad idea.

Tim Welch, a spokesman for the union, noted there's been more talk lately about privatization of state services by the governor, moderate Democrats and Republicans.

"It's a great sound bite, but when you look at it, we've found across the country ... you really do end up in many cases spending more money when you contract out because you lose the accountability," he said.

Welch said the state should instead be looking at thinning the ranks of managers to save money, and going after "folks who aren't paying their fair share of taxes."

The lottery brought in roughly $523 million in revenue in fiscal year 2011. About $150 million went to the state, mostly for education. The rest of the money covered the cost of doing business, including prizes, administration and commissions. It employs around 135 people, according to the lottery director.

Among the lottery's offerings are Lotto, scratch tickets and multistate lotteries.

Arlen Harris, a spokesman for the lottery, said about a half-dozen states have private contracting with their lotteries.

The Democratic Ways and Means committee leaders in the House and Senate said they were open to the governor's proposal but wanted to make sure it penciled out for the state.

Rep. Gary Alexander, the ranking Republican on the House Ways and Means Committee, said his caucus had already been considering the idea.

"I think we should be looking at any opportunity to privatize or reduce the footprint of government, and look at whether there are other ways to deliver those services in the private sector," he said.

Lottery Director Bill Hanson declined to comment when asked if he thought privatization made sense. "I think I'm a little too close to the situation to make that kind of judgment," he said.

The governor on Thursday also proposed eliminating the three-member state Liquor Control Board and replacing it with a director to oversee licensing and enforcement. Initiative 1183, approved by voters in November, ends the state-run liquor business and puts it in the private sector.

The Associated Press contributed to this story.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com

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