Challenges to lottery privatization plan add up for Corbett
HARRISBURG — With challenges mounting to the proposed privatization of the Pennsylvania Lottery's management, Gov. Tom Corbett's administration is trying to counter negative publicity and make the case that a British firm's $34 billion bid is the best option to satisfy growing demand for state services for the elderly.
The firm, Camelot Global Services, which runs the official lottery in the United Kingdom, submitted the sole bid to manage the $3.5 billion lottery system, pledging at least $34 billion in profits over 20 years.
Camelot's bid over the contract's first 10 years adds up to an estimated $500 million to $1 billion more than what could be achieved by the state employees who run the lottery, Secretary of Revenue Daniel Meuser said on Tuesday.
“Our official projections over the course of the next 10 years are far less — I mean, $1 billion less — than what this procurement would yield,” Meuser said.
Camelot's bid expires on Dec. 31, and Corbett is considering delaying the deadline if necessary to answer questions about the move and to allow unionized employees time to offer a competitive alternative, which is guaranteed in their contract.
A Camelot spokeswoman would only say on Tuesday that the Dec. 31 bid expiration date has not been postponed. If Corbett accepts the bid, Pennsylvania would become just the third state to privatize lottery management after Illinois and Indiana.
Corbett faces a lawsuit filed on Monday by the employees' union — Council 13 of the American Federation of State, County and Municipal Employees — four lottery employees, seven Democratic lawmakers and two senior citizens.
It challenges the Republican governor's authority to award the contract and expand the scope of lottery gambling.
Auditor General Jack Wagner, a Democrat, has raised questions over the wisdom of awarding such a large contract to a sole bidder, and state Treasurer Rob McCord, a Democrat, has said he might not authorize payments to Camelot unless its plans to expand lottery gambling are clearly legal under state law. McCord's staff said that Corbett administration officials have not approached him to discuss Camelot's plans or make the case for its legality.
Meanwhile, Democratic lawmakers question why the state should pay hundreds of millions of dollars to a private firm when the lottery is coming off one of its best years and is on track to exceed that performance in this fiscal year.
The 41-year-old Pennsylvania Lottery is one of the nation's largest. It recorded $3.5 billion in sales for the year that ended June 30 and contributed more than $1 billion in profits that went to benefit programs for the elderly, including transit, rent and property tax rebates, prescription drug assistance, senior centers and long-term care services.
Meuser countered that the lottery has had several down years recently — sandwiched around the recession — and a repeat will be unaffordable while the state's considerable elderly population is on course to increase 25 percent by 2025.
“The way the governor has got to look at it is, it will be broken in five to 10 years, so what are (we) going to do about it?” Meuser said.
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.
- Donora-Webster bridge plunges into Mon River after 107 years
- State cites Greene County mine after fatality, checking ventilation doors
- ‘We are’ chant now a permanent fixture on Penn State campus
- Presque Isle Downs cancels thoroughbred races because of running deer
- 2 from Western Pennsylvania charged with insurance fraud
- Pa. could ease restrictions on fireworks, reaping big bang in taxes
- Pa. spared earthquakes from deep-shale drilling
- Pa. lawmakers dive into ride-sharing debate about regulations for Uber, Lyft