Numbers don't add up for lottery lease

The proposed 50-year leasing of the state lottery for $10 billion is another harebrained idea of our governor. Just doing the math tells us why it simply will not work as proposed.

In the last fiscal year, the lottery grossed $2 billion and netted $650 million, a 35 percent profit margin. These were near-record amounts and there is no guarantee of future results.

During much of the last 10 years, the results have been much lower. A buyer would have to net at least $817 million a year just to cover principal and interest at 8 percent over a 50 year period. At a more realistic 9 percent, the amount needed goes to $912 million. The state wants 20 percent of the gross so that leaves only 15 percent, or about $300 million for the buyer to cover these costs. It does not add up.

The lottery would have to gross about $6 billion and net 35 percent or $2.1 billion, less the 20 percent or $1.2 billion for the state, equaling a net of $900 million for the buyer to cover carrying costs. This is not going to happen for a very long time, if ever.

Hopefully the legislature will recognize this proposal for what it is, as mortgaging the future, just the same as issuing a revenue bond (i.e., debt), and kill this bad idea.

Roland G. Ley

Arlington Heights