Finance

British Firm May Run Pennsylvania Lottery

The Corbett administration persuaded a British firm to keep alive its bid to run the Pennsylvania Lottery, gaining time to try to overcome a ruling by the attorney general rejecting the privatization deal as unlawful.
February 19, 2013

By Angela Couloumbis

The Corbett administration persuaded a British firm to keep alive its bid to run the Pennsylvania Lottery past a Saturday expiration deadline, gaining time to try to overcome a ruling by the attorney general rejecting the privatization deal as unlawful.

The firm has agreed to keep its bid valid until Friday, Elizabeth Brassell, spokeswoman for the state Revenue Department, which oversees the lottery, said Saturday evening.

The two sides worked feverishly behind the scenes to negotiate the extension.

The change was necessary because last week, state Attorney General Kathleen Kane, whose office reviews all state contracts for their legality, rejected the administration's deal with Camelot Global Services as running afoul of the state constitution.

Among other things, Kane said the contract usurped the authority of the legislature to regulate and manage the lottery.

Now that the governor has persuaded Camelot to extend the bid, he still has to decide how to respond to Kane. Corbett could challenge her ruling in court, but the administration has not said whether that was the course it would take.

The ruling by the Democratic attorney general was a blow to months of efforts by the Republican governor to close the lottery deal.

On Friday, Brassell had said: "We are confident we will get a short-term extension to preserve the validity of the bid." Officials with Camelot, which runs Britain's national lottery, had declined to comment.

The stakes are high. The Pennsylvania Lottery in the last fiscal year recorded more than $3.5 billion in sales and sent more than $1 billion in profit to programs that help the elderly.

The administration says rapid growth of the state's senior population necessitates exploring ways to boost that profit. Across the life of its proposed 20-year contract, Camelot would guarantee profit 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.

(c)2013 The Philadelphia Inquirer

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