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Democrats take aim at bid to privatize Pa. lottery

Pennsylvania LotteryPennsylvania Lottery: Democrats take aim at bid to privatize Pa. lottery
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HARRISBURG, Pa. — Democratic lawmakers are taking aim at GOP Gov. Tom 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 Corbett for a slew of documents, including the proposed management agreement between the state and Britain-based 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.

A spokeswoman for the state Department of Revenue, which runs the lottery, insisted Tuesday that the drive to award a private management contract had been "a fair and deliberative process." The agency would share as much as it could with Costa, such as the management agreement, but some information would remain confidential, spokeswoman Elizabeth Brassell said.

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. Only a couple of states have given private companies the right to manage their lotteries, and a substantial expansion of lottery gambling to keno and online games is expected to be part of Corbett's plan to produce more lottery revenue.

One of the nation's largest state lotteries, the 40-year-old Pennsylvania Lottery had $3.5 billion in sales in its last fiscal year. Of that, almost $1.1 billion was profit benefiting programs that the Corbett administration says directly support nearly 1 million elderly Pennsylvanians.

Corbett administration officials expect to decide by Dec. 31 on whether to award the contract to Camelot, which 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, according to figures released by the Department of Revenue. That amounts to an annual lottery profit increase of about 3 to 4 percent a year, in line with the lottery's performance over the past decade. Last year, lottery profits rose by more than 10 percent and are on track to exceed that number in this fiscal year, as well.

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 transit programs, 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 House Democratic Whip Mike Hanna of Clinton.

What Camelot stands to make depends on the amount by which lottery profits exceed its annual projections, according to the Department of Revenue.

Camelot would be paid incentives for exceeding its profit projections, up to 5 percent of profits, the most allowed under federal law. Its compensation would include its invoiced costs, while less than 0.75 percent of profits would be allowed to cover its indirect, non-invoiced expenses, according to the department.

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

AP

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4 comments. Last comment 1 year ago by Original Bey.
Page 1 of 1
haymaker's avatar - Lottery-012.jpg
egg harbor twp.south jersey shore
United States
Member #112972
June 29, 2011
3059 Posts
Offline
Posted: December 7, 2012, 11:33 am - IP Logged

Anyone notice how these companies only want to improve the well run lotteries ? hmmm....

Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

    Original Bey's avatar - Lottery-022.jpg

    Bahamas
    Member #133467
    September 30, 2012
    4948 Posts
    Offline
    Posted: December 7, 2012, 2:10 pm - IP Logged

    Anyone notice how these companies only want to improve the well run lotteries ? hmmm....

    It's the well ran lotteries that are out looking for bids. I think they've done such a great job and exploited every idea, but still challenge themselves to see enormous growth.

    Ideas dried up and it leads them to look outside. I dont think the impact of this recession is being factored in enough.

     

    Food? Lottery Ticket? It's an easy choice for most.

    "Everything works  ONCE!"

      haymaker's avatar - Lottery-012.jpg
      egg harbor twp.south jersey shore
      United States
      Member #112972
      June 29, 2011
      3059 Posts
      Offline
      Posted: December 7, 2012, 2:20 pm - IP Logged

      It's the well ran lotteries that are out looking for bids. I think they've done such a great job and exploited every idea, but still challenge themselves to see enormous growth.

      Ideas dried up and it leads them to look outside. I dont think the impact of this recession is being factored in enough.

       

      Food? Lottery Ticket? It's an easy choice for most.

      Given the chance, I don't think they would be interested in the poorly run operations unless they could have full control.

      and that would not be a good thing for the players.

      Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

        Original Bey's avatar - Lottery-022.jpg

        Bahamas
        Member #133467
        September 30, 2012
        4948 Posts
        Offline
        Posted: December 7, 2012, 2:27 pm - IP Logged

        Given the chance, I don't think they would be interested in the poorly run operations unless they could have full control.

        and that would not be a good thing for the players.

        Oh I toltally agree.

         

        What frightens me is, the HOW behind these billion dollar pledges. I am losing my shirt as it is - lol!

        "Everything works  ONCE!"