State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

And the winner is... announced before a legislative hearing

Written by Mary Wilson, Capitol Bureau Chief | Jan 14, 2013 4:01 AM
Thumbnail image for lottery1212.jpg

Photo by www.palottery.state.pa.us

This post has been updated to attribute a quote to Sen. John Blake (D-Lackawanna).  Originally, the quote was incorrectly attributed to Senate Democratic Leader Jay Costa. 

The sole private bidder on the operations of the Pennsylvania Lottery could take over in July.

Word came early Friday evening of the Corbett administration’s decision to privatize the $3.5 billion dollar enterprise. The governor’s office released a public announcement shortly after notifying employees of the Pennsylvania Lottery about the changes coming ahead.

The contract with Britain-based Camelot Global Services won’t be finalized until later this week, by January 18, according to a letter from the Corbett administration to Lottery employees, obtained by the Patriot-News.

A state Senate hearing on Camelot’s bid scheduled Monday will still go on as planned. Senate Finance Committee chairman Mike Brubaker, a Lancaster County Republican, said the forum is still needed to “ensure our questions are answered and the issue is properly vetted."

In a written statement, Revenue Secretary Dan Meuser said announcing the “award notice” will allow the administration to share more details about the agreement with Camelot.

But newly elected Democratic Senator Rob Teplitz of Dauphin County said he finds the timing of the award notice disturbing.

“To have this action take place right before a hearing where we were finally going to have an opportunity to get answers to our questions shows real contempt not just for the legislature but for the public, because that’s who we’re representing in trying to safeguard the Lottery,” said Teplitz.

Sen. John Blake, the ranking Democrat on the Senate Finance Committe, said the “entire dynamic” of the hearing will be totally different.

“I just feel like there are constitutional issues here,” said Blake. “There are issues associated with the protection of our seniors programs, property tax relief. It could be interpreted, as we’ve heard a little bit from Treasurer McCord, as an expansion of gaming, which I think is a delicate and serious issue.”

The Corbett administration says it is pursuing a private management deal to increase profits of the Lottery, which funds five programs benefiting senior citizens. The growth of the commonwealth’s senior population, the administration contends, is outpacing the projected growth of Lottery profits under its current public management.

Camelot has guaranteed profits of $34 billion over 20 years, an increase of three or four percent over the Lottery’s current profits. Its promised profits are premised largely on the expansion of Lottery games. The state Treasurer has questioned the legality of such an expansion without the approval of the state Legislature. State lawmakers from both parties have expressed similar concerns.

But the expansion of games was a key contention of a plan offered by the union representing about 170 Lottery employees. The American Federal of State, County, and Municipal Employees Council 13 proposed its own business plan in response to Camelot’s bid. They said they could do better than Camelot’s projected $34 billion, provided games could be added to the Lottery’s repertoire. That proposal was submitted to the Corbett administration Tuesday.

The fate of employees of the Lottery is still not certain. Camelot has said it would retain about 70 current employees.

“There is no guarantee of employment. We’ve been told that the employees have the ability to apply for jobs,” said David Fillman, director of AFSCME Council 13. He said the union still has three avenues to pursue to stop the private management of the Lottery. It has already filed a lawsuit against the Corbett administration, as well as a contractual grievance that will go before an impartial arbitrator, and in February will go before the Pennsylvania Labor Relations Board with a complaint.

“We are not done with this battle,” said Fillman.

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