Markets in everything, deficit spending edition

The Illinois lottery may be up for sale.  The current status is discussed in yesterday’s NYT.  The state hopes to get $10 billion.  The lottery had $630 million in profits last year on sales of $2 billion.  The buyer would get all profit for 75 years.

Here is the source.  Larry Ribstein remarks: "Yet more evidence that a hedge fund is no match for a politician when it comes to short-term thinking."

Comments

How about establishing, then privatizing, a salt monopoly?

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But we can't legalize gambling, that would be so wrong.

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It's hard to see how this can be a good deal when you take federal taxes into account. A private company would have to pay income tax on its profits that the state doesn't have to pay, so the after tax cash flow to the state is greater that to a private buyer.

Besides, if Illinois needs $10 billion what about issuing bonds against future lottery proceeds. Seems like a cheaper way to raise money.

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Everything comes back in style, including tax farming. Coming soon near you, privatized IRS.

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Let's see... that's about a 6% ROI. More expensive than Illinois bonds, I would guess, which makes it short-sighted, though not as bad as I'd have guessed.

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Profits are over 30% of sales? What a business. I wish that we did that well in the drug industry, let me tell you.

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