HARRISBURG, Pa. — Pennsylvania received one bid in response to its search for a private manager to run the state's lottery system, officials announced Tuesday.
Gov. Tom Corbett's administration announced on Tuesday that a priced bid and 20 years' worth of annual profit commitments has come in from United Kingdom-based Camelot Global Services PA LLC.
Camelot, the firm that currently operates the United Kingdom's lottery, was the only company to submit a bid outlining how much revenue it pledged to raise over a 20-year management contract.
Camelot's commitment promises to grow the profits from just more than $1 billion to $2 billion by 2033. That would include adding keno and other online lottery game options.
An administration official told legislative staffers and union officials in a conference call that two other firms that had expressed interest but have since dropped out of the running for this lucrative contract. Among the reasons that were cited included discomfort with some of the protections that the state was seeking from the successful bidder.
The commonwealth began exploring a private management agreement for the lottery eight months ago as a way to maximize its profit and ensure secure, predictable funding for programs benefitting the state's growing senior population.
Camelot's bid is valid until Dec. 31 and is supported by $50 million in bid security the commonwealth would retain if Camelot is awarded the bid but fails to execute the contract. PMA but fails to execute the contract. The firm would put up $150 million in cash collateral and a $50 million line of credit to guarantee its profit commitments, an administration official told the staffers and union officials.
The state could also tap into that pot of money if the manager goes insolvent or breaks teh contract terms, among other reasons.
Revenue Secretary Dan Meuser called receipt of the priced bid an important milestone in the process.
"While there are several additional steps before we'll be prepared to make a final decision, this is a proposal that warrants a complete and detailed review, and it is encouraging to see the potential private manager propose 20 years of significant profit growth," Meuser said.
The administration already has begun discussions with union officials about possible layoffs that would result. The agreement with the private lottery manager would require they retain 70 state employees, but Revenue spokeswoman Elizabeth Brassell said the bidder has expressed interest in the possibility of hiring some of the lottery's other 160 employees.
The state's lottery is one of the nation's top performers, which is among the reasons why Democratic lawmakers and union officials have questioned going the privatization route.
Last year, the lottery posted a record $3.2 billion in ticket sales, producing a profit of nearly $961 million to put into programs for senior citizens. It administrative costs, around 2 percent of ticket sales, are among the lowest of lotteries operating in the nation.
David Fillman, executive director of American Federation of State, County and Municipal Employees Council 13, said, "There is no good reason to dismantle the lottery. The administration has sold out our seniors and our members without one public hearing; without any legislative oversight and without anyone knowing how they crafted the terms and cut this deal.
"Keep in mind that our lottery is not broken. We've set a record for total sales and net profit the last two years. The bottom line here is that every single dollar that this firm is paid comes at the expense of our seniors."
If the bid is accepted, Pennsylvania would join Illinois and Indiana in hiring an outside firm to manage its lottery system. Several other states, including New Jersey, reportedly are considering taking a similar step.
British Rule? Been there - Done that!
The British invasion was welcome with the Beatles and Stones.
But our government and state lotteries?
Didn't like the Beatles or the Stones...don't want no bloody Brit rule of PA lottery either.
They've lost their f$cking minds.
DR. I wanted to come on and tell you that the store owner mentioned this today. He isn't sure if it will be good or bad if it passes. Can't be any worse than now, can it?
The promise to raise revenues for the state means more ticket sales but lesser winners.
I hope PA residents reject this privatization. Can they?
I too am apprehensive about the privatization of the lottery just as I am apprehensive of privatizing social security. As history abounds, the so-called "supply and demand" philosophy cannot work very well in both instances.
This is a good news for Pennsylvania, Camelot's commitment should make sure of this promise of increasing the profits. Let's just wait and see what happens next with this bidding.
I dont know what the current lottery system is in Pensnsylvania but dont be surprised if Camelot decide to raise the bar or raise the cost of a ticket just to increase profits.
prolly can't do anything about it, except do like folks in tennesee and just play MM & PB,
or if they live near the borders they could play out of state.
be warned if you come to jersey you can cross the DRPA bridges (philly area) free to jersey, but it'll cost $5.00 to get back across.
there some bridges w/ lower tolls further north, even some free ones. in out of the way places.
Any time some greedy polition initiates something for the good of someone, somewhere that has NOTHING to do with
benefitting what and who the program intends to benefit, it is NOT a good thing. Just take a look at that Corbett, you
tell me what good he's got in store and for who? It's not the playing public, that's for sure. Banner year last year and
that azzhole wants to change things now. Change is good when something is not working...take a look at PA and their
profits...it IS working. Now, the next thing that has to work is how they shell out those benefits....HELP THE PEOPLE,
don't ROB them.
Camelot..promising big time profits for PA...HOW...by ripping off the already ripped off senior citizens and lottery playing
public. Keno? Keep it. Online plays...keep that too. There are enough outlets already for anyone almost anywhere to be
able to play the lottery. Just walk into a Giant or Redner's - it's already there. Any gas station you go to, it's already there.
Greedy, money hungry vultures is what they are...and YES I'm on a rant. It's an outrage and EVERYONE should be on a
rant.
Good Point dr65...but one thing I would like to see is the online cause you have alot of senior citizens that can't get out due to what ever reason it might be...don't drive...bad weather...health issues......so it would be nice to see them have that advantage.....
This is what has happened with the Illinois lottery since Northstar took over.
On scratchers where you match one number to win, 9's In a Line, Fabulous 5's, etc.... prior to Northstar the digits on the scratchers were always one digit, i.e. 1 through 9. now, you may be trying to match a 5 or a 7 but scrtch to reveal two digit numbers, plenty of them.
The $1 Little Lotto became Lucky Day Lotto, with an EzMatch option for another $1. The top EzMatch prize is $500 but the odds against hitting it are 210,000 to 1. Bewtter off putting the other dollar on the Pick 5 itself.
The Pick 6, Lotto, now has an Extra feature, another number increases the prize if you won something, and have the Extra. You don't pick it, it's just an additional number drawn.
In other words, they've come up with different ways of doubling the ticket prices without really doing anything much for the player, just as Newb pointed out.
The government knows the people are badly divided and cannot mount a united opposition.
And it looks bad if they are in the talking stage already, its probably a done deal and all that remains is the formalities.
Yikes, the UK Running the lottery?