Lottery deal: 10-day delay
Pa. and a British company agreed to extend talks. The workers' union plans a bid.
HARRISBURG - A potential deal to privatize management of the Pennsylvania Lottery was put off for an additional 10 days Monday after Gov. Corbett and a British company agreed to extend negotiations.
Hours before the $34 billion bid by Camelot Global Services PA L.L.C. was set to expire, the Revenue Department announced the bid was extended until Jan. 10.
The Revenue Department said the additional period would provide sufficient time for the lottery workers' union to submit a proposal of its own. The state also is waiting for a risk-mitigation consultant's report about whether Camelot is a suitable manager. State legislators have raised questions about the proposal.
Camelot, which runs Britain's national lottery and is a consultant to the California Lottery, is pledging to generate at least $34 billion in profits over a 20-year contract. The company released a statement Monday saying it hoped to retain "as many current lottery employees as possible" and intended to incorporate and locate all operations in Pennsylvania.
Camelot's plans include introducing keno to bars and restaurants, expanding the number of lottery retailers, improving the portfolio of games, and changing marketing strategies to capture a broader spectrum of players, particularly those in higher-income households.
Some Democratic lawmakers and antigambling Republicans have raised opposition to the idea, while Auditor General Jack Wagner, a Democrat, has questioned the wisdom of awarding such a large contract to a sole bidder. In addition, state Treasurer Rob McCord, a Democrat, has said he may not pay Camelot unless its plans to expand lottery gambling are clearly legal.
The state Senate Finance Committee has announced a Jan. 14 hearing to review the proposed plan, and administration and Camelot officials say they are willing to testify.
The union, AFSCME Council 13, sued Dec. 17, challenging the governor's authority to award the contract and expand the scope of lottery gambling without legislative approval.
Camelot's bid over the contract's first 10 years is an estimated $500 million to $1 billion more than what could be achieved by the state employees who currently run the lottery, Secretary of Revenue Daniel Meuser has said.
In a news release Monday, Meuser's department said a second bid extension would be negotiated if, after the union proposal and "probity report" are submitted, "a private management is determined to be in the best interest of protecting and growing lottery funding."
Only two states, Illinois and Indiana, have hired private companies to manage their lotteries.
The value of the Pennsylvania Lottery contract to Camelot will be hundreds of millions of dollars in management fees and potential incentives for exceeding its profit guarantees.
The 41-year-old Pennsylvania Lottery, one of the nation's largest, logged $3.5 billion in sales for the year that ended June 30 and contributed more than $1 billion to programs for the elderly, such as transit, rent and property tax rebates, and prescription drug assistance.