The Virgin Islands retains another dubious distinction, according to a recent Source article. (See "Pension Bonus Depends on Lottery Collections.")
In the article, the then-acting director of the V.I. Lottery, Lenyse Shomo, reported that the agency can’t help the pensions system because it is not making enough to break even, but should be out of the red by June.
The governor, three days later, appointed a new lottery director. This time it is to be Conrad E. Francois.
The dubious distinction is that the V.I. lottery is the only one under the U.S. flag to ever run at a loss. And this is not the first time that this has occurred.
Eight years ago, in another op-ed, I reported that I had had a long conversation with David Gale, executive director of the North American Association of State and Provincial Lotteries. The membership in the organization includes all the U.S. state and Canadian provincial lottery organizations; the V.I. lottery was a member at the time of our talk. (See "LOTTERY DEFICIT UNHEARD OF … ELSEWHERE.")
I called him to get some background on how other lottery agencies — all government monopolies — had fared. My inspiration was an audit by the V.I. inspector general, reported by the Source, that said: "as of Sept. 30, 1999, the lottery had reported an accumulated account payable [i.e., loss] to the General Fund totaling $3.3 million."
Gale said at the time that while some of his organization’s member agencies had been in trouble, while some had lower profits than projected, and while others had experienced some theft of lottery funds, no member had ever run a year at a loss. And he had been in the business for a long time.
I could feel him shaking his head as we talked over the phone that day in May 2001; how do you lose money if you have a legal monopoly, if you can manage both your own expenses and the size of the lottery prizes? How do you lose money in such a situation if no other agency ever loses money?
Now running a lottery is not like running the schools or the police; there is no non-monetary public benefit from having a lottery — no kids to be taught or criminals to be caught. The only point is to raise some money for the government, and if you can’t routinely make a profit year after year, why encourage gambling?
Hopefully, the governor’s new appointee will make a difference.
Editor’s note: North, a resident of Arlington, Va., is a former U.S. Department of the Interior official.
