Senate panel puts Pennsylvania lottery privatization under microscope
HARRISBURG — Pennsylvanians would be able to play lottery games in bars, clubs — even at home — within a year or two under a proposed revamp of the system, Revenue Secretary Dan Meuser said on Monday.
Growing the lottery to increase revenue is part of the plan under the contract the state tentatively awarded last week to Camelot Global Services PA, which would act as a private manager of the lottery for 20 years. Republican Gov. Tom Corbett expects to sign the contract, perhaps by the end of the week.
Camelot, which the Ontario Teachers Pension Plan owns, guaranteed the state $34.6 billion in profit over the two decades of the contract. Camelot would bring “world-class expertise” to the lottery, Meuser told lawmakers at a Senate Finance Committee hearing on Monday. He was referring to the company's 18-year management of the United Kingdom's lottery.
The deal will generate $50 million more for the state in the coming fiscal year and $460 million to $530 million more during the next five years, Meuser said.
Alex Kovach, president of Camelot, said the company's plan is to expand markets so “a lot of people play a little.” The company would look to bring back “lapsed and infrequent gamblers.” It is not a plan to cut costs or employees, he said.
Keno could be in bars and clubs by the end of the year, and residents could buy lottery tickets online in a couple of years, Meuser said.
Once Corbett signs the contract, Kathleen Kane, a Democrat who will be sworn in Tuesday as attorney general, will have 30 days to review it for “form and legality.” Her signature is required for the deal to go through.
Asked when the contract with the state will be final, Dianne Thompson, Camelot's CEO, told lawmakers that it is up to the Corbett administration. “It's slightly complicated,” Thompson told a Senate panel. “You have a new attorney general.”
She later said she did not mean she was concerned, only that the new attorney general would have to get up to speed.
Pennsylvania's lottery, established in 1971, is the only one in the nation whose proceeds exclusively benefit senior programs. They range from low-cost prescription drugs to property tax and rent rebates.
Corbett said he wants to expand lottery revenue because of Pennsylvania's growing senior population. The state has 2.7 million people 60 or older. By 2030, it will have 3.6 million.
Because Camelot would front $200 million to cover any shortfall in its revenue projections, administration officials said $75 million in a lottery reserve fund could go to programs.
Peter Tartline, executive deputy secretary in the governor's budget office, said some criticize Corbett's tentative deal with Camelot on the basis it's a lone bid. It's not.
Two other bidders dropped out, one stating it was a “one-sided” deal for the state, Tartline said.
The two other bidders were the Tatts Group of Australia and G-Tech of Rhode Island, Tartline said.
“Yes, this (contract) is a sweetheart deal,” Tartline said during the hearing. “It's a sweetheart deal for Pennsylvania seniors. It's a sweetheart deal for the commonwealth.”
Some in the Legislature might challenge the contract with legislation or litigation because of the provision allowing Camelot to add keno numbers games. Opponents say only the Legislature can approve an expansion of gambling.
The leader of a union representing state workers said using a “foreign corporation is illogical, erroneous and frankly disingenuous.” David Fillman, executive director of the American Federation of State, County and Municipal Employees Council 13, expressed disbelief that Corbett would privatize lottery management coming off record sales in 2012.
Brad Bumsted is state Capitol reporter for Trib Total Media. He can be reached at 717-787-1405 and firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- New Police Interceptor hits the road in Kittanning
- Cleanup crews hitting Armstrong Rails to Trails in April
- Reversing the field: Pirates continue to raid Yankees for hidden skill
- Recent early retirements in NFL could be trend — or simply a coincidence
- Steelers’ Tomlin, Pirates’ Hurdle share similar philosophy
- Injuries to Penguins’ Ehrhoff, Letang force defense to pick up slack
- Business roundup: DEP to hold 1st hearing on Shell permit for cracker plant; more
- Five is enough for Penguins’ defensemen
- Fire reported at recycling facility in Braddock
- Pgh. International leader strives to inject Pittsburgh flavor into airport
- Daily Courier roundup: Falcons, Scotties win on no-hitters