There is a furniture store north of Toronto that has been holding going-out-of-business sales for at least the past two years. The store buys heavy flights of radio advertising on weekends that force you to find another station to listen to. It seems that the Ontario government is also having one of those sales and you actually wish it was advertised as well as the furniture store. At least the sale could be better run.
It seems that the government is going out of the business of scratch cards and on-line lotteries. You wonder why there is not a lot more interest when you hear that it is a profitable business generating $3.3 billion per year in revenue. It makes you want to go down to Queen’s Park, knock on the Premier’s office door and ask her if she knows what the hell she is doing.
First of all, there are really two businesses here. And maybe there should be three or four. And what has this government got against competition? If you are going to privatize something like lotteries, it is idiotic to not create some competition in the business while you are at it. Giving this to just one company is a guarantee of going nowhere. After all, the only reason to privatize is to increase revenues.
One company is stupid; two companies might compete; and three companies are an open market. If the government wants to earn more revenue, it has to open the market.
But to sell a government monopoly to a business monopoly is about the dumbest idea we have heard in a long, long time. People often accuse civil servants of being bureaucratic simply because they work for government. That is an ignorant assumption. Some of the most bureaucratic people we have ever met work for banks, insurance companies and Bell Canada.
While there are some positives to the bid being made by British-based Camelot Group—that seems to be a holding of the Ontario Teachers Pension Plan—you would sometimes swear that the Brits invented bureaucracy. What we know for sure is that competition works and monopolies can stagnate.
The one thing for sure is that on-line lotteries are a different business than scratch cards. Some of the most serious potential for growth is in the on-line lotteries. The Internet can take this product world-wide and it needs different thinking than new types of scratch cards at Ontario convenience stores.
The guy who is going to make the greatest mess of this is Ontario Treasure Charles Sousa. Charles is a banker for goodness sake. The best bid to a guy like him will come from the bidder with the most money. He wants reliability when we need entrepeneurs!
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Copyright 2014 © Peter Lowry
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