July 19, 2013 – Controversy has swirled over Gov. Tom Corbett’s efforts to privatize the lottery after only one bidder, U.K.-based Camelot Global Services, had their bid rejected in a Pennsylvania court.
Pennsylvania citizens say the Lottery is working well enough on its own.
Yesterday’s financial reports, which showed record-breaking sales and profits over the past year, would seem to strengthen those claims, as the Lottery’s expenses did not include the $3.5 million spent on the search for a private operator.
And while that money is a drop in the bucket compared to the more than $1 billion in profit the Lottery raked in last year, the underlying problem with the contract is that nearly 200 jobs could be eliminated by the private operator.
The deal was initially struck down because, according to state Attorney General Kathleen Kane, Corbett had “overstepped his executive authority in trying to privatize [the lottery] without legislative approval,” according to a Pennlive.com report at the time.
Elizabeth Brassel, a spokeswoman for Pennsylvania’s Department of Revenue, told Pennlive.com reporter Jan Murphy that it would be wrong to assume the money spent on privatization efforts detracted from the state’s lottery benefits.
“If these expenses were not incurred or expected, that money would likely have been dedicated to other investments to grow sales and profits,” Brassel said.
However, the $3.5 million spent on finding and fighting for a private contractor amounts to about 10 percent of what the Lottery spent on advertising last year.
In June alone, the Pennsylvania Lottery spent $4 million on advertising.
The Pennsylvania Lottery’s proceeds go directly to programs that help senior citizens in the state, and Corbett began his search for a private operator in hopes of securing sustainable growth to match the growing number of seniors.
Camelot Services has promised the state $34.6 billion in profits over the next 20 years, and has pledged a $200 million payment as insurance for any profit shortfalls.