Outsourcing Pa. Lottery management bid deadline draws near

Aug 28, 2013, 12:38 pm (11 comments)

Pennsylvania Lottery

Pennsylvania Gov. Tom Corbett once again finds himself days away from having to make a decision about what to do about his plan to privatizing the management of Pennsylvania Lottery.

The latest extension of a bid from United Kingdom-based Camelot Global Services, the only company to submit a bid to do this work, expires on Friday. It is the ninth extension to the bid's expiration date originally set to expire Dec. 31.

As of Wednesday morning, there was still no decision to accept it, reject it or seek a 10th extension, according to Elizabeth Brassell, a spokeswoman for the Department of Revenue, which oversees the lottery.

A Camelot spokeswoman said the company has no comment at this time.

In its bid, Camelot promised to generate $34.6 billion in profits over the next 20 years. The Corbett Administration has said that is $3 billion to $4.5 billion more than the lottery would produce by keeping its management in-house.

But state Attorney General Kathleen Kane raised constitutional and legal challenges to the administration's ability to proceed with outsourcing the lottery's management and rejected the contract. Since then, the administration has been working on trying to figure out how to address Kane's concerns to allow the outsourcing to proceed.

Opponents of the outsourcing have challenged the need to bring in an outside manager after seeing that the lottery last year broke sales and profit records that were set the year before. They also point out polls show voters consider this a low priority for state government.

Meanwhile, speculation is growing that Corbett may be developing a plan to abandon the privatization and proceed with trying to boost lottery profits by allowing the in-house lottery operation to add Keno to its portfolio.

Increasing profits as well as assurances of sustaining those higher profit levels was the appeal to Corbett for outsourcing the lottery's management. Camelot's plan, which included adding Keno, came with a $200 million security fund that the state could dip into if profits came in below the company-set profit targets.

Corbett saw that as a way to ensure funding would be there to continue providing lottery-funded services to the state's growing senior citizen population. Those services include prescription assistance, property tax/rent rebates, transportation services, funding for senior centers and nursing home care.

Administration officials adamantly deny that any decision about the lottery outsourcing has been made at this point, although they acknowledge discussions are ongoing.

Some of those talks took place at a private meeting last week that involved Corbett, some of his staff, a lottery representative as well as representatives from the lottery's contracted New York-based partner, Scientific Games International.

House and Senate Republican legislative leadership sources confirm that it is their understanding that the lottery privatization continues to be a topic of discussion and has not been ruled on or off the table.

But Senate Democratic Leader Jay Costa, D-Allegheny County, has heard the speculation that the administration is going to walk away from the outsourcing idea, something that his caucus has been advocating since Camelot's bid was originally received back in November.

"If it's true, we think it's an appropriate position," Costa said. "It's the right thing to do."

Patriot-News

Comments

rdgrnr's avatarrdgrnr

They broke sales and profit records last year.

I don't understand why they'd want to farm it out.

Unless they just feel incompetent at the administration of it.

But that's typical of most all government agencies.

RedStang's avatarRedStang

Quote: Originally posted by rdgrnr on Aug 28, 2013

They broke sales and profit records last year.

I don't understand why they'd want to farm it out.

Unless they just feel incompetent at the administration of it.

But that's typical of most all government agencies.

I Agree! Why out source when everything is positive. Tom needs to take a ride to the UK and see what players think about Camelot.

dpoly1's avatardpoly1

 Attorney General Kathleen Kane thinks that SHE makes laws instead of enforcing them!

haymaker's avatarhaymaker

Quote: Originally posted by dpoly1 on Aug 28, 2013

 Attorney General Kathleen Kane thinks that SHE makes laws instead of enforcing them!

Kane raised constitutional and legal challenges, sound like enforcement to me.

dpoly1's avatardpoly1

Quote: Originally posted by haymaker on Aug 28, 2013

Kane raised constitutional and legal challenges, sound like enforcement to me.

There is more to her than this story!

It IS the perview of the State Supreme Court to decide Constitutionality!

Jon D's avatarJon D

Opponents of the outsourcing have challenged the need to bring in an outside manager after seeing that the lottery last year broke sales and profit records that were set the year before. They also point out polls show voters consider this a low priority for state government.

Whenever govt tries to undertake a questionable project that doesn't make sense, follow the money. It should be scrutinized to look for kickbacks, especially if there is only a single bidder for the contract.

rdgrnr's avatarrdgrnr

Quote: Originally posted by Jon D on Aug 28, 2013

Opponents of the outsourcing have challenged the need to bring in an outside manager after seeing that the lottery last year broke sales and profit records that were set the year before. They also point out polls show voters consider this a low priority for state government.

Whenever govt tries to undertake a questionable project that doesn't make sense, follow the money. It should be scrutinized to look for kickbacks, especially if there is only a single bidder for the contract.

"...follow the money."

Bingo.

Abdi's avatarAbdi

I DON'T THINK THIS IS A GOOD IDEA they should have extended their deadline.

TheGameGrl's avatarTheGameGrl

Ironic that we are a "Common" wealth (defined: a  : one founded on law and united by compact or tacit agreement of the people for the  common good) 

yet eagerly enjoying the opportunity to "sell" off-

For sale!  One lottery division, One Liquor Division , and Turnpike! 

I'm gonna wait though til they sell off the Department of Revenue and then go in for the deal! :)

Buy one get three free!

bigbear29

I"m surprised they are not outsourcing to China.

jamella724

I hope they will be able to cover all the concerns with regards to outsourcing. They don't have to rush just because the deadline is near. They need to determince all the advantage and disadvantage of outsourcing so they will come up with a good decision.

End of comments
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