Corbett administration scrambling to save lottery deal

HARRISBURG - With one of Gov. Corbett's biggest initiatives hanging in the balance, top administration officials worked furiously Friday behind closed doors to keep alive their hopes of a lottery privatization deal with a British firm.

A spokeswoman for the state Department of Revenue said the administration was negotiating with Camelot Global Services for a short-term extension of its bid to run the Pennsylvania Lottery. That bid is scheduled to expire Saturday.

An extension would give Corbett time to figure out how to contend with the major setback dealt to lottery privatization efforts Thursday by state Attorney General Kathleen Kane. Kane, whose office reviews state contracts for legality, rejected Camelot's, saying among other things that it usurped the authority of the legislature to make decisions on the lottery's management and operations.

Corbett can seek legal recourse, though he has yet to say whether he will challenge Kane's decision in court. But that question might become moot if Camelot does not extend its bid.

Elizabeth Brassell, spokeswoman for the Revenue Department, which oversees the state lottery, said the two sides were working on negotiating an extension of a week or two.

"We are confident we will get a short-term extension to preserve the validity of the bid," she said.

Officials with Camelot, which runs Britain's national lottery, declined to comment.

The stakes are high. Corbett has worked for months to bring in a company to run the lottery, which last fiscal year recorded more than $3.5 billion in sales and sent more than $1 billion in profits to programs that help the elderly. The administration says rapid growth of the state's senior population necessitates exploring ways to boost those profits. Across the life of its proposed 20-year contract, Camelot would guarantee profits of $34 billion.

Even if Corbett manages to get the deal back on track, another challenge awaits in court - from Democratic legislators and the union that represents lottery employees.