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December 4, 2012

Dems taking aim at bid to privatize Pa. Lottery

Marc Levy Associated Press

HARRISBURG — Democratic lawmakers are taking aim at the Corbett administration’s move to privatize the Pennsylvania Lottery’s management, saying it is shrouded in secrecy and will result in a corporate giveaway that diverts hundreds of millions of dollars from the state’s services for the elderly.

In a Friday letter, Senate Minority Leader Jay Costa, D-Allegheny, asked Gov. Tom Corbett for an unredacted copy of the proposed agreement between the state and Camelot Global Services, an unredacted copy of Camelot’s bid and a full explanation of the scope of expanded lottery gambling being considered.

“A decision as important as handing over an extremely well-run, efficient, and successful lottery to a foreign company should not be made behind closed doors, by a limited amount of people and without public input,” Costa wrote.

Corbett has said he is exploring privatization of the lottery management to see if a private company can help ensure that lottery profits keep pace with demand for programs that benefit the state’s growing elderly population. A substantial expansion of lottery gambling to keno and online games is expected to be part of the Republican governor’s plans to produce more lottery revenue.

One of the nation’s largest state lotteries, the Pennsylvania Lottery had $3.5 billion in sales in its last fiscal year, of which about $1 billion was profit that benefited programs for the elderly.

Corbett administration officials expect to decide by Dec. 31 on whether to award the contract to Camelot, a Britain-based company that runs the national lottery in the United Kingdom. It is the lone bidder after two other companies, which the Corbett administration will not identify, dropped out.

Camelot is pledging to produce more than $34 billion in profits over 20 years if it wins the contract to manage the $3.5 billion system, profit projections that are in line with the lottery’s past performance.

In a separate statement Monday, House Democratic leaders said the proposed agreement would ensure that Camelot stands to reap hundreds of millions of dollars in profits that otherwise would go to programs for the state’s elderly, including transit, rent and property tax subsidies, prescription drug assistance, senior centers and long-term care services.

“This is nothing short of a massive corporate giveaway,” said Democratic Whip Mike Hanna, D-Clinton.

A spokeswoman for the Department of Revenue, which runs the 40-year-old Pennsylvania Lottery, said she could not immediately respond to the lawmakers Tuesday.

Last year, Illinois became the first state to have a private company run its lottery. Indiana’s lottery goes private in February, and New Jersey has been considering such a move.

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