Penn. Gov. Corbett considering privatizing state's lottery

Nov 26, 2012 6:47 PM

Pennsylvania Gov. Tom Corbett is considering privatizing the state’s lottery activities but the plan is facing a ton of opposition.

After keeping a lid on his plans for several weeks, Corbett last week finally revealed the identity of a company from the United Kingdom with which his administration has been having conversations. The company, Camelot Global Services, has pledged to produce more than $34 billion in profits over 20 years if it wins a contract to run the lottery.

The bid is good until Dec. 31, the company said.

This is the first time the Corbett administration has identified the bidder since announcing in April it was considering privatizing the activity.

Involved are some 230 employees who are currently employed by the Pennsylvania Lottery. If the privatizing plan is adopted, all but 70 employees would face the task of interviewing with Camelot Global Services to keep their jobs.

That doesn’t sit well with many lawmakers and heads of the state’s labor unions. They point out that lottery sales last year increased by 8.5 percent. So why, they ask would the governor consider letting a private, British-based company, take over.

Camelot Global Services noted its bid would increase annual lottery profits by 3 percent or maybe 4 percent. By 2033, Camelot would have to produce as much as $2 billion in profits after paying prizes and expenses, roughly double what the Pennsylvania Lottery produced at the end of the last fiscal year.

The Corbett administration says expanding lottery gambling to keno and online games will be crucial to producing more revenue, regardless who runs the system.

Reportedly, two other companies had indicated an interest in taking the state’s lottery functions. Both, however, have dropped out of the bidding.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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