First Posted: 10/29/2013
HARRISBURG — Gov. Tom Corbett decided Tuesday to keep his option alive for at least two more months to hire a private manager for the $3.7 billion Pennsylvania Lottery, as another of Pennsylvania’s three statewide row officers began to question the plan.
The administration said it had agreed with the British national lottery operator, Camelot Global Services, to extend the company’s bid through Dec. 31.
The Corbett administration said nothing about how it will deal with Attorney General Kathleen Kane’s rejection of the contract as illegal, but his administration signaled for the first time Tuesday that it is talking to top legislators about it.
On Tuesday, Senate Majority Leader Dominic Pileggi, R-Delaware, said discussions with the Corbett administration had begun in recent days on the broader subject of expanding gambling to raise more money to cover the state’s rising costs.
The Senate would not support legislation to resolve the issues in the Camelot contract raised by Kane because of concern over potential job losses among Pennsylvania Lottery employees, Pileggi said, and because it was unclear how an expansion of gambling under Camelot would fit in with the rest of Pennsylvania’s legalized gambling.
“I think we need to understand how all the pieces fit together if we’re going to do a large-scale expansion of the state lottery system,” Pileggi said.
But, he said, such an expansion could include a role for a private firm like Camelot.
In the 20-year contract, Camelot had pledged to generate $34 billion in lottery profits. It could extract hundreds of millions of dollars in fees and receive built-in cash incentives by exceeding its annual profit commitments.
Corbett, a Republican, has maintained that Camelot’s commitment is a stronger and more stable source of revenue than state employees could deliver as the state eyes growing demand for services for the elderly that are underwritten by the lottery.
Critics say it would allow Camelot to divert hundreds of millions of dollars that otherwise would go toward programs for the elderly.
One critic, Auditor General Eugene DePasquale, said Tuesday that he has directed his staff to review Corbett’s $3.4 million tab for consultants in his bid to hire London-based Camelot.
DePasquale, state Treasurer Rob McCord and Democratic lawmakers have called repeatedly for Corbett to abandon the pursuit of Camelot.
In February, Kane, whose office reviews state contracts, rejected the contract as illegal, saying state law does not allow the governor to privatize the operation or management of the lottery or allow the expansion of gambling that the contract would permit.
Meanwhile, McCord has threatened not to pay Camelot if he was not satisfied with the legality of the plan.
Part of Camelot’s strategy is an expansion of gambling — installing up to 3,000 keno monitors in places like restaurants and bars — and providing online access to games.
However, Pileggi and other Republican senators have insisted that a Camelot-run Pennsylvania Lottery not be able to compete with the state’s 12 casinos through online gambling.
Last week, the Senate approved a bill that would expand legal gambling to thousands of bars in Pennsylvania — a step that the Corbett administration said could hurt Pennsylvania Lottery profits.