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Corbett extends British company’s lottery management bid until Dec. 31

HARRISBURG — Despite mounting criticism from Democratic officeholders, Republican Gov. Tom Corbett’s administration on Tuesday granted another bid extension to a British company that is seeking to manage the state lottery through a long-term, $34 million agreement.

The 20-year Pennsylvania Lottery privatization plan, which Corbett defends as necessary to assist a rapidly growing senior population, has stalled since February, when state Attorney General Kathleen Kane, a Democrat, rejected the proposal because it lacked legislative approval for electronic terminal games called keno.

The attorney general must approve or reject state contracts based on “form and legality.”

Corbett’s proposal was criticized this week by two other Democratic officeholders, Treasurer Rob McCord and Auditor General Eugene DePasquale, for $3.4 million paid to consultants and lawyers.

McCord’s spokesman, Gary Tuma, said Corbett “continues to waste time and effort on what is really an ideological pursuit.”

McCord is among several Democrats expected to challenge Corbett’s run for re-election next year.

The extension until Dec. 31 will allow the state to pursue legislation to increase money for older Pennsylvanians’ programs, Corbett’s office said.

Jay Pagni, the governor’s press secretary, said it’s unfortunate that critics are “politicizing the issue.”

Senate Majority Leader Dominic Pileggi, R-Delaware County, said the privatization plan, as written, would not pass the Senate. Pileggi said he would consider looking at new revenue for senior programs through lottery expansion and other means.

“To me, this is the very beginning of a discussion with the administration,” Pileggi said, noting that the Senate recently approved small games of chance for bars.

He said lawmakers could consider keno or another funding source.

“We think it is worth the governor continuing to pursue it,” said Stephen Miskin, spokesman for House Republicans. House leaders have no agreement to pursue keno, he said.

Older Pennsylvanians “deserve every effort of my administration and the Legislature to make sure they have access to the programs upon which they rely,” Corbett said. “It is our responsibility to ensure that the lottery is positioned to grow in order to meet growing needs.”

Established in 1972, the lottery funds senior programs ranging from Meals on Wheels to in-home care services and low-cost prescription drugs. The games pay for about 75 percent of the state Department of Aging’s budget, administration officials said.

More than 1 million older Pennsylvanians receive services.

McCord said consultants’ fees will come out of lottery-funded programs. If the deal goes through, the contractor, Camelot Global Services PA, would provide a pool of money to cover expenses such as consulting and legal fees, Pagni said.

The state stands to collect $150 million a year from Camelot, according to Corbett’s plan. Camelot, which runs the United Kingdom’s National Lottery, has agreed seven times before to extend its bid.

A company spokesperson said Camelot agreed to another extension so that Kane’s concerns can be addressed.

“Our proposal will produce unprecedented profits for senior programs, and we have backed our investment in Pennsylvania with $200 million — transferring all risk from state taxpayers,” the company said. “Camelot has indicated it would headquarter in Pennsylvania, pay all taxes required of any commonwealth business and keep all lottery jobs in the state.”

But House Minority Leader Frank Dermody, D-Oakmont, said “it’s beyond time for the Corbett administration to abandon its plans to hand over management of our highly successful lottery to a foreign company. This spectacle has gone on for far too long, and it is costing our seniors, who benefit from lottery-funded programs, millions of dollars.”

Corbett has said he’s taking a long-term view. In 30 years, officials project one-fourth of the state’s population will be 60 or older.

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787- 1405 or [email protected]tribweb.com.


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