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Union fights effort to privatize Pa. Lottery

Jan 9, 2013, 12:09 pm

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Pennsylvania Lottery

The union that represents Pennsylvania Lottery employees is fighting Gov. Corbett's move to privatize its operations.

With a day to go until the private company's offer is set to expire, AFSCME Council 13 is waging a strong counterattack against outsourcing the profitable lottery in the courtroom, the Statehouse, and the streets.

This week, a particularly edgy — some might consider over-the-top — billboard appeared near the Capitol, skewering the British firm that is the sole bidder for the lottery, which dedicates 100 percent of its profits to programs for seniors.

The billboard depicts a caricature of a pig in a suit with a Union Jack on its lapel, holding a vacuum cleaner that is sucking dollar bills out of an elderly woman's purse.

"I don't think we're off base. It gets the point across," said David Fillman, executive director of Council 13, which represents most of the 220 lottery employees and is suing the state to stop the privatization move. "This is a big corporation from another country that is going to make profits off a lottery, the only one in the country where profits go solely to seniors."

On Tuesday, the union contended that the current lottery system could outperform the offering of Camelot Global Services L.L.C. if the state was willing to offer new gambling opportunities.

Union officials said that with expanded offerings such as the video-game keno or online gaming anticipated in the privatization contract, the current lottery could generate $800 million in additional revenue over the next six years. That is revenue that would go for senior programs such as prescription drugs, transportation, and long-term care.

"The lottery's been in business for 42 years, and last year was a banner year," Fillman said. "The one group that knows how Pennsylvania works are those who have been there."

The proposal contends the company will not meet the administration's goals of providing "significantly higher" profit levels than the lottery could achieve on its own.

The union said its analysts determined that lottery profits, which now stand at $1 billion, would decline in the first three years under a private manager, as millions were redirected to the firm in profits as well as incentives and bonuses that could be spent on needy Pennsylvanians.

"To say seniors will get more money is disingenuous at best," said Kristie Wolf-Maloney, grievance and arbitration manager for Council 13 and an author of the report.

Department of Revenue spokeswoman Elizabeth Brassell said the agency had only just received the union proposal and could not comment on it until it conducted a "careful review."

To guarantee its 20-year, $34 billion bid, Camelot is setting aside $200 million in a security fund with the understanding that the state could tap into it if the company fails to meet its annual profit goals.

But the union says the proposed agreement with Camelot puts a cap on the amount it would pay the state that would be not greater than 5 percent of that year's "profits." The company's offer was to expire Dec. 31, but an extension to Wednesday was agreed upon to allow the union to prepare its counterproposal.

Brassell said no determination had been made on a second extension, but the House and Senate have scheduled hearings this month to examine the proposal.

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