THE PRIVATIZATION OF STATE LOTTERY (PFM) ISRAEL JIMOH.
"Early in American history, lotteries were quite common but also were generally operated by private organizations, not by state governments. For example, the construction and expansion of many early private American universities, including Harvard and Princeton, were financed in part through lottery sales. Prominent American leaders also lent their support to lotteries designed to raise funds for public works. John Hancock's signature appears on lottery tickets sold to fund the construction of Faneuil Hall while George Washington administered the unsuccessful 1768 Mountain Road Lottery in Virginia, and Ben Franklin organized a lottery during the American Revolution to finance the purchase of cannons to aid in the defense of Philadelphia (Matheson and Grote, 2008).".
In light of this background, I find it intriguing that Federal law prohibits states from outsourcing their entire lottery operations to private companies, for more efficiency and profitability. The fact that lottery sales have been an important component of state government funding for many social programs speaks volumes. So, it is no surprise that the tide is rising again in favor of privatization of the state lotteries, after many years of abandonment due to moral objections, fraud and the development of alternative sources of revenue for the state governments.
On the other hand, (Mikesell, 2001) seems to suggest that the lottery does not form a significant portion of the state finances in spite of its large proceeds. He argues, "These amounts are not sufficient to provide either significant tax relief or support for crucial state functions, no matter how politically easy the revenue might be to generate. If a state has important fiscal imbalance, a lottery is unlikely to correct it." For all who assumed that the lottery forms a big chunk of state government's revenue, this is an eye-opener.