Editorial: Lottery must use money for intended purpose
Published 12:00 am Monday, February 23, 2004
Now that auditors have released a report on the Minnesota State Lottery, lottery officials can use the information and get started setting the lottery on the right track.
An audit released Thursday stated that the Minnesota State Lottery spends more money and provides less to the state than comparable lotteries. The audit also recommended the lottery should revisit its ties to the St. Paul-based marketing company Media Rare Inc.
The audit revealed that Media Rare never competitively bid on a contract with the lottery. The marketing firm was founded by a friend of the lottery’s late director, George Andersen, and was overpaid by the lottery in several instances.
There have been numerous questionable lottery projects involving Media Rare, including the lottery’s $400,000-a-year sponsorship of a bass tournament run by the company. The auditors found the tournament to have “limited value.” Media Rare also produces the television show “Environmental Journal,” and leases the so-called Environmental Experience vehicle.
Auditors reported the lottery spent $1.4 million over five years for the vehicle, which is “infrequently used and is of questionable value.” The auditor added it would have been cheaper for the state to buy the vehicle outright. The television show cost the lottery $1.2 million a year and had “limited benefits.”
The lottery was also found to have spent 66 percent more of its sales revenues on its own operations than comparable lotteries.
There were also “significant problems with the lottery’s spending and procurement practices, to the point that the report recommends the Legislature and governor consider reducing the lottery’s budget beyond cuts made last year. And another recommendation, that the state general fund absorb $2.5 million in unclaimed prize money, also has some merits.
It’s encouraging that the lottery’s acting director has already begun making changes, including canceling the lottery’s sponsorship of the bass fishing tournament. We know policies that have been in place 15 years won’t change overnight, but with some common-sense practices in place, there isn’t any reason the Minnesota State Lottery can’t be as profitable as that of any other state, and run as it was intended.