Government & Politics
7:37 pm
Mon December 31, 2012

UK Company Extends Offer to Run PA Lottery

The Corbett administration and a British company have mutually agreed to extend the firm's bid to run the Pennsylvania Lottery.

The bid by Camelot Global Services PA LLC was originally set to expire today, and Camelot has now extended the deadline to Jan. 10, 2013.

The extension allows the union representing Lottery employees to present to the state a counter-proposal which is due by January 8.

According to the Department of Revenue which operates the Lottery, the bid extension will also allow additional time for Kroll Advisory Solutions, a risk mitigation firm, to complete its report to the state on the suitability and integrity of Camelot as a potential private manager.

Camelot’s bid proposes $34 billion to the state over 20 years.  Its plans include introducing keno to bars and restaurants, expanding the number of lottery retailers, improving the portfolio of games and changing marketing strategies. The bid continues to be supported by $50 million in bid security the commonwealth would retain if the bidder is awarded the private management agreement but fails to execute the contract.

Revenue Department spokeswoman Elizabeth Brassell said once the union counter-proposal and the probity report from Kroll are received and considered, and if the administration decides to privatize the Lottery, a second bid extension would be negotiated by Camelot and the commonwealth. 

State law requires the lottery to produce 27 percent of its sales in profit for the state, but that floor rises to 30 percent in 2015. The Corbett administration will ask the legislature to keep the required profit level at 27 percent through the life of the contract, Brassell said.

In April, the commonwealth began exploring a private management agreement for the Pennsylvania Lottery as a way to maximize Lottery profit and ensure secure, predictable funding for programs benefiting the state's senior citizens.

State Senate Democratic leaders have indicated the administration does not have the authority to privatize the Lottery on its own.