Governor not taking sides in lottery plan

Tom Sharp

Wednesday, July 30, 2003 | 10:50 a.m.

NASHVILLE, Tenn. -- Gov. Phil Bredesen said Tuesday he believes the proposal for an alliance between the Tennessee and Georgia lotteries is an idea that needs considering, but will not takes sides on the issue.

Rebecca Paul, director of the Georgia lottery, told the Tennessee Education Lottery Board at its second meeting Monday she could foresee a "long-term strategic alliance" between the two states that could save both of them money.

She said the similarity between the two state laws creating the lotteries -- Tennessee modeled its law on Georgia's -- holds potential that could be beneficial to both.

Paul's pitch was light on specifics, but she said Tennessee could get its lottery running several months earlier than planned by tapping into existing contracts Georgia has with its lottery vendors. That also would give Tennessee $250 million to $300 million of gross lottery proceeds in hand.

She said Georgia, in turn, could leverage the addition of Tennessee's lottery to lower its costs for those contracts. She also mentioned advertising and purchasing as possible areas of cooperation.

Bredesen said such an alliance should be considered by the seven-member board he appointed.

"I don't think it answers all the issues. There are lots of hard questions that ought to be asked about it," he said Tuesday after a speech to a business group in Nashville. "I hope they'll consider it as one of the alternatives, but if they decide to go the other way that's fine, too."

Bredesen said he "genuinely doesn't have any detailed knowledge" of what Paul has in mind.

"I think it's an economy of scale, first of all, but it's always harder to go out and start looking at resumes and put together an organization than it is to ask an existing organization to come in and do it," he said. "In some of these areas like dealing with the outlets and the technology, it just seems a way to potentially tap into someone who's already done it and has a track record of success."

There could be disadvantages for Tennessee, the governor said.

"We're going to be competitive with Georgia. I think we ought to be careful to retain our ability to compete and try not only to keep our people home but to get some of those north Georgia people into our lottery as well," he said. "They've certainly gotten a lot of money out of Tennessee over the years."

He said the board should be cautious, and that he expects it to be.

"Anytime somebody's proposing something to you, you need to at least suspect being led down the garden path," he said. "But there's nothing about Rebecca Paul and her career that would lead me to believe she's anything other than very straightforward in what she's proposing. I don't think there's any hidden agenda there."

Bredesen said that's what corporate boards are for -- to look at questions like this.

"That's why you do due diligence, that's why you write contracts," he said. "The people on the lottery board know their way around this stuff, they know how to protect against those things. I have enormous confidence in their ability to not only make the decision, but to do it in a way that protects the state of Tennessee."