CLEVELAND, Ohio — State Auditor Mary Taylor officially begins her review of the Ohio Lottery Commission next week, two months after lottery officials tried to close the door on her by arguing that the attention is unwarranted.
Auditors and lottery officials are scheduled to sit together next Wednesday at kick-off meeting during which the approach and scope of the audit will be outlined.
The decision to conduct a performance audit of the $2.4 billion state agency is unusual because such audits are typically initiated by a state agency itself, seeking advice on improving operations. Taylor requested this one in October, citing the uncertain nature of gambling revenue, complex Keno game operations and passage of Issue 3, which allows casinos in four Ohio cities. She said these create an "environment of heightened risk" for the lottery.
Lottery Commission Director Kathleen Burke, with the backing of Gov. Ted Strickland's office, initially rebuffed the request. She said last month that the review "does not seem reasonable, necessary or a wise investment of public funds." She also complained that the lottery's sound financial performance refutes Taylor's concerns.
"The fact that the Lottery has generally experienced consistent revenue growth contradicts your statement that gaming revenue from month to month and venue to venue is uncertain and therefore results in additional financial risk," Burke wrote in letter to Taylor.
Under Ohio law, the auditor or the legislature can call for a performance audit on the public's behalf. But this is the first such audit initiated by Taylor against the wishes of an agency that is not in financial trouble.
The audit — separate from yearly audits of financial statements and regular monitoring of game drawings — will examine staffing, planning and budgeting, games and oversight by the administration, among other things.
A Dec. 22 letter from Taylor's office to Burke includes a two-page outline of the performance audit's scope and a two-page request for documents. It appears from the outline that the auditor is interested in taking a close look at Keno, the numbers game added in 2008.
While Keno generated nearly $100 million in sales in the first fiscal year, which ended June 30, sales numbers were a big disappointment, coming in well below the projected $292 million in sales. Lottery officials have blamed slow sales on the difficulty of signing up retailers, such as bars and restaurants, which are reluctant to dedicate wait staff to processing Keno tickets during peak times.
The lottery had hoped to have 2,000 lottery retailers on board but has about 1,300. The lottery hopes that new self-serve Keno devices in bars and restaurants will boost retailer interest.
A representative from Taylor's office and from the lottery commission have already met twice to develop a framework for the audit. Lottery spokeswoman Marie Kilbane Seckers said the lottery staff is collecting information to assist with the audit.
Burke appears to be on board as well.
"The Ohio Lottery anticipates continuing its good working relationship with the Auditor of State," Burke said in a statement to The Plain Dealer. "The agency is proud to be a U.S. lottery industry leader, with eight consecutive years of revenue growth."
Taylor, according to her letter, hopes to release the performance audit publicly in late June or early July.
You have to wonder about the motives of both sides on this issue.
Why would the Auditor want to investigate a seemingly successful and profitable state lottery? Is it politically motivated? Personal vendetta?
And why does the Lottery Director so vehemently object to being audited? Something to hide?
It'll be interesting to see how this shakes out after the taxpayers foot the bill for the whole thing.
Someone needs to float on down to Tennessee.Do a little peeping aroung the corner.
To someone just looking at the cost of staff needed to have daily ball drawings, computer drawings might look like a worthwhile alternative. Ohio have made several stupid lottery decisions in the past by getting advice from non lottery people on saving money and later went back to the old way of doing things.
Years ago they took the advice of someone who suggested a $20M limit on the amount a lottery ticket was worth even if more money was in the jackpot. People stop playing and a year later they got rid of that rule but their Super Lotto game never recovered to the point it once was and they added MegaMillions to attract more players again.
Three years ago Super Lotto Plus(6/49+1) a $1/board game was starting to come back a little in spite of MegaMillions being added and it was replaced with Lot'O Play(6/100) a $2/board game and again after people stop playing a year later they replaced it with Classic Lotto (6/49) a $1/board game. It was cheaper to run since it started with a $1M jackpot instead of a $4M jackpot as the old SLP game but they could have just changed to the cheaper format in the first place instead going through the farce of changing the games twice.
Now that things seem to be running pretty good and lottery sales are up, it's probably time to try something stupid again to see if a few more dollars can be saved without losing customers.
Why are players afraid of computerized games? Casinos especially those without table games (and in some cases, that also) are totally computerized. An RNG determines when to stop the reels, or what cartoon image to show on the screen. I think the real fear is the game will be TOO random meaning no system can win it. In TN there was a case when doubles couldn't come out.. if you can catch that early on you could win big!
That's the point. Human error and decite can come into play making it impossible to win. We want to win. Mechanical devices are very random and don't depend on human programmers who may make an error or a backdoor to fix a lottery. Common sense.
Thank you jeff !
I have not heard yet what Ohio's stance is on adding Powerball. I hope this issue comes up in the audit if it hasn't been positively addressed yet.