Democrats, union leaders say 'sweetheart' lottery deal could harm seniors

Word that Gov. Corbett was close to inking a deal to lease state lottery operations is drawing criticism among legislative Democrats who want to know why the administration would make such a hasty decision on a deal worth tens of billions with no public input.

The Department of Revenue announced late yesterday it had a sole bidder - British firm Camelot Global Services LLC - to run the state lottery and barring any glitches with criminal background or financial record checks it would move forward with the deal as early as year's end.

 Camelot's bid guarantees the state $34 billion over the 20-year contract with the promise of expanded gaming in the form of online sales and keno.

The lottery is finishing a record year with $3.2 billion in ticket sales that generated $1 billion in dedicated funding to help Pennsylvania seniors by providing property tax rebates and lowering prescription drug costs.

Legislative Democrats say they are angry about being cut out of the process and think turning over lottery operations to a private firm is a gamble that is not worth the risk.

"We’ve been questioning the governor about farming out the lottery, now he’s trying to do this back door when the legislature's not in Harrisburg," said House Democratic leader Frank Dermody (D., Allegheny). "The first question is why? With record profits and low overhead, it's a model across the country. [Camelot] is a for-profit company so we're either going to take away money from seniors or expand gaming and give profits to them." 

Philadelphia Senate Democrat LeAnna Washington said she was alarmed there was only a single bidder and that members of the legislature were not informed about bidding details during the process. 

She also said she is skeptical about the firm's profit margin guarantee and concerned about the potential loss of several hundred jobs and the future impact on seniors.

"This sweetheart deal with a foreign firm could threaten the very programs on which they now rely to meet their daily needs," she said.

By privatizing lottery management, Corbett hopes to boost revenue for senior programs as more Pennsylvanians enter that demographic and maintains no legislative approval is needed to do so.

Dermody disagrees with that conclusion and also points out that any expanded gaming would certainly require legislative approval. He said he is looking into holding hearings on the matter next week, which is the last official week of the legislative session.

Efforts to get comment from legislative Republicans were unsuccessful.

Dave Fillman, executive director of AFSCME Council 13, which represents roughly 169 unionized lottery workers, said there is "no good reason to dismantle the lottery."

“The administration has sold out our seniors and our members without one public hearing; without any legislative oversight and without anyone knowing how they crafted the terms and cut this deal," said Fillman. "Keep in mind that our lottery is not broken. We’ve set a record for total sales and net profit the last two years. The bottom line here is that every single dollar that this firm is paid comes at the expense of our seniors.”



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