Archive for Sunday, January 7, 2001

Senator calls for lottery scrutiny

Lawmakers say renewal decision must be made this year

January 7, 2001

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— Many legislative leaders want to move quickly this year on deciding whether to keep the Kansas Lottery alive.

Not so fast, says Senate President-elect Dave Kerr.

"The lottery has suffered a lot of bad press and some of that is justified," said Kerr, R-Hutchinson. "There are a lot of questions to be asked before any renewal decision is made."

Absent renewal, the lottery, created by voters in 1986, ends July 1, 2002. Legislative leaders want to act early so they can know whether they can count on lottery revenues for government programs in future years.

Also, they say, a decision must be made in 2001 because the lottery will need a year to phase out games, pay off prizes and prepare to shut down.

Chief among Kerr's concerns is a former lottery employee being accused of stealing nearly $63,000 from the agency by getting into the computer system, and the relationship between the agency and GTECH, which runs the lottery's computerized games.

Richard Lee Knowlton is charged with 268 theft, computer crime and official misconduct charges. Knowlton denies any wrongdoing, but stands accused of manipulating lottery computers so losing lottery tickets became winners. Lottery officials say no games were compromised and the public wasn't cheated.

Knowlton's trial is scheduled to begin April 30 in Shawnee County District Court when legislators have finished their business for the year, or are about to wrap it up.

"We had no idea they had security lapses of that nature. We need to be reassured that they have been solved and won't be repeated," Kerr said.

GTECH, of West Greenwich, R.I., has a contract with the lottery, worth about $7 million a year. It expires June 30, 2002, and lottery officials are expected to start negotiating an extension in May or June.

Published reports have said a GTECH administrator told employees to dig up dirt about lottery officials that could be used against them. The reports also said GTECH hosted three receptions for lottery employees last month.

GTECH officials said the reports were without merit. Lottery officials say the receptions didn't violate state ethics laws and that they ran plans by the state Governmental Ethics Commission.

"We want to know more about GTECH's management team," Kerr said.

As for renewal, Kerr said, "I want to first understand where we are on security and GTECH and then be ready to discuss an actual renewal strategy."

Kerr said he wants the lottery legislation to get early Senate committee hearings, adding he expects it will get the green flag from the Legislature.

"The lottery has become something of a fixture and the budget is somewhat dependent on the revenue," Kerr said. "It would create a substantial hole if it were to go away."

The state gets to take at least 30 percent about $60 million of the lottery revenues for government programs. Much of the money finances economic development initiatives, but also pays for education programs and prison maintenance.

"In a tight budget year, it would be a significant reduction in the state's ability to pursue economic development," said Sen.-elect David Adkins, R-Leawood, who was last year's House Appropriations chairman.

House Speaker-elect Kent Glasscock said acting sooner rather than later will allow legislators to plan ahead and hopefully avoid getting the lottery's renewal snared in other issues, such as slot machines.

"There is no need to wait until the end of the session. Once you know what you are going to be doing with the lottery, it takes some of the uncertainty out of future budget years," said Glasscock, R-Manhattan.

Waiting, Glasscock said, also could mean lottery legislation "could sort of get balled up with other issues."

Glasscock said he expects efforts will be made to include slot machines at pari-mutuel race tracks. Such efforts have failed in previous sessions.

"I would rather see passage of a clean lottery bill," Glasscock said. "If the lottery issue is on the floor, there will be an amendment for slots."

Senate Ways and Means Chairman Steve Morris said he expects the lottery issue to be filled with discussion and some contentiousness.

"But I don't see us giving up that pot of money," said Morris, R-Hugoton.

Morris said some legislators will want to divert more lottery money to public schools, but he doesn't think much of that idea.

"Almost all economic development is funded from the lottery. We need to spend more, not less, for economic development," Morris said.

Morris said some lawmakers will argue with passion about gambling being a sin and bad for society, that the state has no business building a budgetary foundation from gambling.

"It's hard to argue with that," Morris said. "There are people who probably spend too much on gambling. But how do you legislate people's lives?"

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