D.C. Considers Privatizing the Lottery

WASHINGTON -- A controversial new way for local governments to raise money has found its way to our area.

The District is weighing a plan to privatize its lottery.

Under the new plan, a private firm would take over the District's lottery for the next 20 years or more, in exchange for a huge lump sum payment up front.

At a press conference on Wednesday, D.C.'s Chief Financial Officer Nat Gandhi -- who supervises D.C.'s lottery -- announced he is "seriously considering" privatizing the lottery.

Privatizing could raise estimates of $1 billion in upfront money, city officials say.

Proponents say the upside of the plan is that if lottery revenues go down in the future, the District is not at risk.

But skeptics say the plan is shortsighted.

They believe privatizing the lottery would place an enormous amount of future revenue in the hands of politicians -- who many be tempted to spend the money right away -- potentially leaving governments with deficits down the road.

The D.C. Lottery raises about $70 million a year for the city's general fund.

D.C. City Council member and Chairman of the Finance and Revenue Committee Jack Evans tells WTOP's Mark Plotkin that he hasn't taken a position on the issue, but the city would have to find a way to replace the $70 million a year for the general fund.

If lottery privatization is approved, the funds would need to be regulated because the city would lose government regulation for safety and security of lottery funds, D.C. City Council Chairman Vince Gray says.

Gandhi tells WTOP he will consider "every revenue source."

The money from privatizing the lottery would be used for infrastructure costs to improve bridges, roads, recreation centers and other city facilities.

Any changes in the way the proceeds are allocated would have to be approved by the D.C. City Council and Mayor Fenty.

Several other states are also debating privatizing their lotteries.

(Copyright 2007 by WTOP. All Rights Reserved.)