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Fontana Discusses PA Lottery Privatization Deal

The Administration has less than a week to execute an agreement that will turn the management of the Pennsylvania Lottery over to a private British company, Fontana says.

Last Friday, the Corbett Administration issued a “notice of award” of a 20-year management contract for the Pennsylvania Lottery's $3.5-billion operation to the British-based firm Camelot Global Services, PA, LLC. The notice of award is not yet a binding contract commitment, but a first step in the privatizing process. The Administration now has less than a week to execute an agreement that will turn the management of the Pennsylvania Lottery over to the private company.

The Administration is currently under a lot of scrutiny by many members of the General Assembly, as well as the labor union representing lottery workers. Prior to a Senate Finance Committee hearing yesterday, there were lots of questions that remained unanswered including if the administration has the authority to expand gaming without legislative oversight, why there is only a single final bidder, which is not Pennsylvania or even American based, to run the operation, or how Camelot is able to guarantee its promise of producing $34.6 billion in profits over the next two decades?

The announcement on Friday was disheartening because it demonstrated a clear lack of transparency. Such an agreement should not have been signed prior to any public hearing or input from the General Assembly who are here to represent their constituents. Our government was set up so that checks and balances are in place so that such a drastic change in policy that affects one of our most vulnerable populations, along with our workforce, is done in a collaborative, deliberative manner.

A  20-year contract is a significant amount of time and older Pennsylvanians are slated to lose the most if this contract does not live up to what has been promised. About 75 percent of the Pennsylvania’s Department of Aging budget comes from lottery revenues including the property tax relief and rent rebate program, free and reduced fare transit, long-term living services, and low-cost prescription drugs through PACE/PACENET. With Pennsylvania having one of the most profitable lotteries in the nation, the contract with Camelot goes back to the theory if it’s not broken, why fix it?

I understand the Administration’s concern that the aging population of Pennsylvania will continue to grow in the coming years and our current lottery system may not be able to bring in the profits to keep up to the demands for the programs. However, a reasonable and respectable approach to this theory would have been to provide access to information throughout this contract process and allow for several public hearings to take place before the announcement.

With regard to the issue of gaming expansion through this deal, as Democratic Chair of the Senate’s Community, Economic and Recreational Development Committee, I believe that any expansion efforts such as internet gaming and keno must be done through legislation.

We owe it to our seniors, the workers and all taxpayers to do better moving forward and provide more transparency in government in the future.

 

Senator Wayne D. Fontana

42nd Senatorial District

www.senatorfontana.com

MSgt. John DeLallo January 16, 2013 at 02:48 PM
Senator Fontana: I often disagree with you based on philosophical reasons, but you have hit the nail on the head. Your article is spot on. I have a very clear recollection of much chatter about transparency in contracting, and eliminating sole source contracts where ever possible. The Lottery is hardly in crisis, and as you so well state it, "if its not broken, why fix it?" I've sent a note to my state rep asking him to delve into this. Did we learn nothing when we attempted to "fix" small games of chance? I'm hopeful the House and Senate will agree to scrap Act 2, and start over with a specific prohibition insuring the Pennsylvania State Police stay out Small Games of Chance.
Gary Reiche January 16, 2013 at 04:51 PM
There has GOT to be a qualified company in this state to handle our lottery.If not,at least in our country.If we do go overseas,it should start out on a trial basis.20 years?C'MON !!
Joseph January 16, 2013 at 07:45 PM
Something does seem shady. It's so difficult to find any information on this subject. Would love to see Camelot's plan to increase profits by $34 billion over 20 years, and an analysis of how this will affect senior programs. How does this effect government expenditures (short-term and long-term)? etc, etc, etc. That being said, if new technology, new games, etc can bring in more revenue without as many outlays, go for it. The U.S. Post Office wasn't broken for years, but now it's on the verge of bankruptcy. Action rather than reaction is needed! "...I believe that any expansion efforts such as internet gaming and keno must be done through legislation." Curious... why is that a BELIEF? As Democratic Chair of the Senate’s Community, Economic and Recreational Development Committee with a full staff, isn't it your job to KNOW that?
Theresa January 16, 2013 at 11:48 PM
Shady?...hmm everything about this plan is terrible. Someone should investigate, someone like the AG, Kathleen Kane.

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