State House Sound Bites

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

Camelot waxes confident about growing Pennsylvania's Lottery participation

Written by Mary Wilson, Capitol Bureau Chief | Jan 14, 2013 10:20 PM
Thumbnail image for Pennsylvania-Lottery-logo2.jpg

In an earlier version of this story, we wrote that Camelot plans to retain about 70 employees.  That has been corrected to show the state plans to retain those employees.  Camelot has suggested it may hire some of the remaining state workers.  State House Sound Bites regrets the error. 

Under a proposal to privatize the Pennsylvania Lottery, Keno drawings could start this year, online Lottery tickets could be a reality by 2015, and games could eventually be available at 3,400 additional retailers.

More details about a Britain-based firm’s plans for the Pennsylvania Lottery have been released, now that the Corbett administration has signaled it wants to finalize the deal.

Camelot Global Services has promised an increase in profits for the Lottery, based on expanding the selection of games, but the company is also elaborating on its plan to tap the market of potential customers in Pennsylvania.

At a state Senate hearing Monday, CEO Diane Thompson said there’s always some subset of people that just won’t play the Lottery. In in the United Kingdom, where Camelot runs the national Lottery, it’s about six percent of the population.

“Through the research, we didn’t find anything more significant than that here in Pennsylvania, it’s just [with] the marketing and the games so far, people [are] saying, it’s not for me,” said Thompson. “But the potential is there.”

Sen. Mike Brubaker, chairman of the Senate Finance Committee holding the hearing, suggested what Camelot envisions for growing Pennsylvania’s Lottery customer base may not be realistic.

Camelot said 50 percent of U.K. residents play the Lottery per week, while it has found that between 10 and 30 percent of Pennsylvanians play the state Lottery weekly.

The Corbett administration, which is negotiating the deal, has said the state will likely keep about 70 current employees of the Lottery, which has more than 230 employees in total. But Alex Kovach, Camelot’s president, said his company has a commitment to add to its headcount.

“This is not about costs. This is about driving the top line,” Kovach said. “The real benefit in Lottery is selling more in a responsible way, so we would be looking to increase people over time and employment in Pennsylvania and that would absolutely be people based here in Pennsylvania and headquartered in Middletown, as the Lottery currently is.”

It’s not yet clear when the contract with Camelot could be finalized, since it’ll require the signatures of several offices, including the state Attorney General. That post, after Tuesday afternoon, will officially be held by Democrat Kathleen Kane.


Other details gleaned from Monday’s proceedings:

  • $75 million currently held in reserve with the public management of the Lottery will be freed up under Camelot’s control. Decisions about how to parcel out those funds for programs benefitting seniors would be left up to the General Assembly.
  • The contract with Camelot requires that 80 percent of resources – including hours worked, employees, and purchases – must be in Pennsylvania, so the company will have to pay state taxes.
  • No more than $30 million would be paid to all of the three consulting groups that advised the Corbett administration during the bidding process, if a contract were to be executed. The money would come from a $50 million sum put up by Camelot.

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Comments: 2

  • GOPDad img 2013-01-15 09:48

    Mary, you are wrong about the 70 employees. The plan is for the State to retain approx. 70 employees to carry out functions that they want to maintain control over, such as drawings, licensing, security, etc. Camelot will then have the option of hiring the remaining 160-170 current Lottery employees.

  • Myrna Flahart img 2013-01-15 10:39

    Terrible idea. I hope the sale is successfully challenged. I forsee Camelot suing the state when Pennsylvanians reject the idea of online sales or any other conflicts. Millions in legal fees. Bad form all around.

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