Corbett Challenges Critics, Awards Lottery Contract to Private Firm

PA Lottery logoDespite the heated and visible debate over the privatization of the $3.5 billion Pennsylvania Lottery, the public was notified of the most definitive decision thus far via press release from Gov. Tom Corbett’s office late Friday.

On January 11th the Pennsylvania Department of Revenue announced that the Commonwealth issued a notice of award to Camelot Global Services PA, LLC.

The award is not a binding contract. Rather it will allow for the disclosure of contractual and procurement details at the Senate Finance Committee Hearing taking place Monday morning (the Hearing had been scheduled prior to the announcement).

Camelot, a U.K.-based firm, was the only firm to bid for a contract to last 20 to 30 years, and promises to produce $34 billion in profits. If the contract is executed, Pennsylvania will be the third state to privatize its lottery management.  The new bid deadline is set for January 18th at which time signatures for contract execution will be required.

Pennsylvania Democrats are criticizing the Corbett administration for acting without the oversight of the General Assembly and for not submitting to public scrutiny. Senator John Blake (D-Lackawanna) said, “This process wasn’t transparent — it was opaque. No one could see the end result except a small group of the governor’s inner circle.”

Additional concerns from state Democrats include questions about how privatization will affect senior citizens and gaming-related property tax relief.

The Pennsylvania Lottery workers’ union is taking legal action to prevent an agreement with Camelot and has filed a grievance and unfair labor practice charge.

State Secretary of Revenue Dan Meuser has supported the Governor’s plans to privatize the Lottery, saying that his goal is to increase future profits. The privatization plan was put into action after demographic information showed that the growing senior citizen population in Pennsylvania would exceed the means of Lottery-sponsored programs.

Although critics of the privatization plan cite the high profits of 2011 as a reason to abandon the plan, Meuser said that over a longer term, 2006 to 2010, net profits decreased by $7 million.

This is not enough to dissuade critics like State Treasurer Rob McCord (a potential 2014 gubernatorial candidate) who is questioning the legality of the deal.  He is joined by House Minority Leader Frank Dermody who wrote to Attorney General Linda Kelly urging her to pass on the legal review of the privatization bid to Attorney General-elect Kathleen Kane.

In a letter on January 9th Treasurer McCord implied that if the contract were to be executed, he would reject payments to Camelot saying, “The execution of the (private management agreement), … should not be based on an assumption that the payment of public funds will be authorized by my office to expand lottery gaming beyond the existing statutorily prescribed lottery sales agent system.”

7 thoughts on “Corbett Challenges Critics, Awards Lottery Contract to Private Firm

  1. Good Lord, do you people know any other word other than “union?” Very childish response. Could there possibly be any other reason for opposition to this?

  2. Taft Hartly. Does that require the government to be a collection agent for a private tax free union?

    Does it require government to force a person to pay union dues as a condition of employment?

    I think we may be reading it differently. Worker freedom is compromised by automatic dues deductions. If it were a free choice, like buying something at Wal*Mart, the government and unions, colluding, would not have to coerce the worker, would they?

  3. Rep Conklin is a Democrat explains his opposition. The Democrats are owned by the Unions and when a Democrat speaks, it is a Union speaking. Thank you for the correction.

    Thanks for the clarification. It is the management contract not a sale.

  4. The PA Lottery is not being sold. Pennsylvania will maintain ownership of the lottery during the contract. Camelot will be managing the lottery.

    Also, Representative Conklin is a Democrat.

  5. The Unions object to the sale. For seniors and for The Forgotten Taxpayer, it is a good deal. Frequently Asked Questions

    http://www.commonwealthfoundation.org/research/detail/private-lottery-management-faq

    Representative Conklin, an alleged Republican, is well aware that the Unions oppose privatization because the public sector loses about $100,000 in forced dues. Rep. Conklin is further well aware that Unions control the Democrats (who, in any event, cannot be trusted with money along with Union Republicans) and have turned enough Republicans to stop privatization of lottery just as they stopped privatization of liquor stores (the bill was not even brought to a vote in the House). Putting this bill to the legislature, in effect, stops privatization.

    Governor Corbett led! Good work. He should try it more often. His numbers might improve.

    http://www.centredaily.com/2013/01/14/3464218/conklin-questions-speedy-decision.html#emlnl=Newsletters_Morning

  6. The majority of the people of the Commonwealth of Pennsylvania Object to this selling of the assets of the state. I am asking for a boycott of all state lottery sales until this plan is abandoned and the jobs are returned to the citizens of this State.

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