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Corbett tries to delay deadline on bid to privatize state lottery operation

| Saturday, Dec. 29, 2012, 12:01 a.m.

Gov. Tom Corbett's administration said it is trying to extend a Monday deadline to approve the lone bid to run the $3.5 billion-a-year state lottery.

As criticism intensifies against an attempt to privatize the operation, lawyers from the Department of Revenue and Camelot Global Services are negotiating an extension on Camelot's bid to run the lottery.

Revenue officials want United Kingdom-based Camelot to extend the deadline by two to three weeks to allow time for a union counter-offer and for the administration to participate in a mid-January Senate hearing on the proposal, Revenue spokeswoman Elizabeth Brassell said on Friday.

The union representing lottery workers has until Jan. 8 to issue its offer, and the state has 10 days to respond.

A spokesman for Camelot, the lone bidder for the lottery, said talks are continuing. He declined to comment further.

The attempt to postpone the deadline comes as critics, including Auditor General Jack Wagner, said the deal needs scrutiny.

Camelot, which runs the U.K.'s lottery, has guaranteed the state $34 billion over 20 years. Its bid includes an expansion of lottery games, but few details about the deal are public, Wagner said.

The state lottery posted $3.5 billion in sales last year and provided $1 billion for programs aiding senior citizens.

“If this lottery is so successful, if it is so profitable, are you telling me that there is no American company that would be part of the bidding process?” Wagner said. “If this is a good deal, there should be competition in the bidding process.”

Two bidders, whom the Revenue Department declined to name, dropped out. Wagner said sole-source contracts, in which only one bidder appears to meet the state's criteria, have led to boondoggles in recent years — including the state Liquor Control Board's wine-kiosk program that “ended up being a disaster” and the sale of the State Office Building Downtown, which cost taxpayers “at least $50 million.”

Camelot, in an opinion piece submitted to several newspapers, touted its 18 years' experience running the U.K. lottery and noted it has worked with the California State Lottery since 2009.

“We plan to incorporate and locate all of our lottery operations in Pennsylvania. With our offices here, we will pay all relevant taxes, making our investment in Pennsylvania total and complete,” wrote Alex Kovach, managing director of Camelot.

Brad Bumsted and Mike Wereschagin are staff writers for Trib Total Media. Bumsted can be reached at bbumsted@tribweb.com. Wereschagin can be reached at mwereschagin@tribweb.com.

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