British company in line for Pennsylvania Lottery deal

HARRISBURG - Gov. Corbett is poised to award a contract to operate the state's lottery to a British-based company that is promising $34 billion in profits over 20 years.

Camelot Global Services PA L.L.C., part of a company that runs the national lottery in the United Kingdom, was the only company to bid.

Elizabeth Brassell, a spokeswoman with the Department of Revenue, said the contract could be awarded by year's end once the company's financial history is reviewed and criminal background checks are completed.

"The receipt of a priced bid represents an important milestone in this process," said Revenue Secretary Dan Meuser. "While there are several additional steps before we'll be prepared to make a final decision ... it is encouraging to see the potential private manager propose 20 years of significant profit growth."

Meuser said the state would consider the bid against past and projected lottery performance to ensure that it provides profit growth above what the lottery could achieve on its own.

Camelot's bid is valid until Dec. 31 and contains $50 million that the state would keep if Camelot is awarded the contract but backs out, she said.

By privatizing lottery management, Corbett hopes to boost revenue for programs for seniors.

Democrats and union leaders have opposed privatizing the 41-year-old lottery, pointing to record ticket sales last year. The lottery generated $3.2 billion in ticket sales last year and all proceeds - nearly $1 billion last year - go to help older Pennsylvanians.

They also raised issues about the secretive nature of the lottery bidding process over the last seven months.

"There are a lot of unanswered questions," said Bill Patton, a spokesman for House Democrats. "Most of the process was conducted behind closed doors with no public hearing."

The Pennsylvania Lottery employs 232 people, of whom 169 are union members, said Brassell.

She said the department will engage the union in discussions and that there will be an opportunity for them to meet with the state officials and propose alternatives to the contract that would achieve the same goals.

Brassell said Camelot expressed interest in hiring "a significant number" of current employees.

Illinois and Indiana use outside firms to manage their lottery systems. New Jersey, with the eighth-largest lottery in the nation, is among other states considering privatization.

Camelot is owned by the Ontario Teachers Pension Fund.