Senate’s required timeline for lottery sale puts state at serious disadvantage

We’re hearing the Senate version of the budget is going to include language to sell off the Ohio Lottery to private investors, and it includes a specific date by which that sale has to occur: June 2012.

Because, you know, there’s nothing like a motivated seller and a time sensitive deal to really boost the value and improve our bargaining position. And given that we now have casinos approved and will likely have VLTs, we can expect the offers – and ultimately the final selling price – to be pretty damn low.

It leaves me wondering if this may be exactly the expected outcome.

As Mark Naymik revealed in Sunday’s Plain Dealer, the language to privatize the lottery that will most likely be included in the budget was actually written by GTECH – one of the companies who could end up getting the very lucrative contract to operate the lottery.

GTECH, not surprisingly, has hired long time friend of Kasich Don Thibaut to be their lobbyist. And the other company most likely to get the contract, Intralot, has hired Robert Klaffky and Douglas Preiss, also good friends of John Kasich.

As the Dispatch reported last week, Preiss, Klaffky and Thibaut have become the go-to guys for companies who want special treatment from the Governor’s office and their sudden success as first time lobbyists is really “testing the credibility of Kasich’s oft-made promise that friends will get no special treatment.”

Expect a more detailed posts about the financial implications to the state, but for now remember: this legislative language was written – supposedly word-for-word- by on of the companies who will most likely be receiving the state contract and who stands to make millions as a result. And it is being pushed by lobbyists who are long time friends of the Governor. And it shows.

Setting a timetable for selling the lottery puts the state in a really poor bargaining position. Having to sell the lottery by a certain date removes one of the state’s primary tools for negotiating the price of the deal and it provides GTECH and Intralot to ability to force the state to accept a much lower price than we should be getting simply because of the statutory requirements to sign a contract by a certain date.

Someone in the Governor’s office needs to get Mark Kvamme in touch with Senators Niehaus and Widener to explain the basics of negotiation and how their bill screws the state before talks have even started.