Category Archives: Lottery/Gaming

Re-privatized NYRA has mostly the same directors

Source: Rick Karllin, Times Union, June 8, 2017
 
The New York Racing Association, which in April was returned to private control after five years of state oversight, has a new board of directors. Under the privatization deal, lawmakers and Gov. Andrew Cuomo agreed to let the current board’s executive committee name eight of the 17 board members. As expected, they mostly reappointed themselves to the eight seats. There are, however, two new voting members, Richard Violette and Jeff Cannizzo, both with the state horsemen and breeders associations.

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New York Racing Association Privatization Plan Approved
Source: Tom Precious, Blood Horse, April 8, 2017
 
The New York Racing Association, operating under the control of the state government since 2012, will be returned to private hands under a deal that came together April 7 at the New York Capitol.  The measure was quietly and tentatively agreed to days ago, but it was caught up in a larger fight over the state budget that halted passage of it and dozens of other unrelated matters. That fight ended late Friday night. …

Governor Cuomo vetoes NYRA privatization bill
Source: NEWS10, February 2, 2017

The New York Racing Association won’t be going public anytime soon. New York Governor Andrew Cuomo vetoed a bill that would have switched public control of NYRA to the private sector. The governor left the bill unsigned past its deadline, triggering an automatic veto. The state took over NYRA in 2012, however, Governor Cuomo has laid out more plans in his 2017 budget to eventually re-privatize the horse racing association.

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N.J. Lottery Sales Fall Short Following Privatization

Source: SNJ Today, April 18, 2017

Those hoping to win big in the New Jersey State lottery are spending less on their dreams.  State lottery sales are down for the third year since being privatized.  Lottery operations management firm Northstar New Jersey promised a return of more than $1.4 billion over 15 years when New Jersey Governor Chris Christie moved the games to privatization in 2013.  Since then, Northstar has missed its income projections and spent $20 million in allowance funds to cover financial shortfalls. …

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Privatizing lottery isn’t lucrative deal for New Jersey
Source: Michael Catalini, Associated Press, January 9, 2016

New Jersey might get $1 billion less out of its state lottery as part of an amended 15-year deal with the private company that runs part of it, according to an Associated Press analysis. The deal, unveiled by Gov. Chris Christie’s administration on New Year’s Eve, also reduces the amount the company must generate to avoid penalties. The revenue targets that Northstar New Jersey has to meet have been lowered by about $76 million per year over the contract, which was struck in 2013. The total revenue projection was decreased from nearly $16 billion to about $15 billion. … The underperformance — including a $5 million drop in revenue in 2015 — has raised questions from Democrats about the privatization strategy championed by Christie, a 2016 Republican presidential candidate who promoted lottery outsourcing as a way to shrink the government’s payroll and bring in more cash. The lottery brought in $960 million in fiscal year 2015, down from initial expectations of a little more than $1 billion.

New Jersey Having Second Thoughts After Privatizing Lottery
Source: John Reitmeyer, NBC Philadelphia, October 8, 2015
Two years after New Jersey turned over some state lottery functions to a private venture under a controversial long-term deal, lawmakers are questioning why revenues have not met expectations and whether the privatization contract is worth it. The Senate Legislative Oversight Committee announced yesterday that it will hold a hearing on October 19 to review New Jersey’s deal with Northstar New Jersey to address concerns raised in recent weeks about fees Northstar is collecting even as it has failed to meet net-revenue targets. An Assembly committee is also scheduling a hearing on the deal. … Gordon, the Senate committee chairman, said the hearing on October 19 will also review the broader privatization issue, and whether the state is up to the task of monitoring such large contracts. He cited problems the state has had with private companies handling some of the recovery efforts in the wake of Superstorm Sandy in 2012 as another reason to broaden the scope of the hearing.

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Lawsuit alleges Illinois lottery contractor cheated players, vendors

Source: Jeremy Kohler, St. Louis Post-Dispatch, March 13, 2017

A company hired to manage the Illinois Lottery cheated players and lottery vendors by misrepresenting the odds of winning scratch-off games, a class-action lawsuit in federal court alleges. The case, originally filed last month in St. Clair County Court, was removed last week to federal court in the Southern District of Illinois. … Northstar Lottery Group LLC took over the state lottery in 2011 after then-Gov. Pat Quinn agreed to privatize it. The suit alleges that Northstar printed far more scratch-off tickets than it intended to sell, then would discontinue games before grand prizes were awarded, locking in profits. The allegations in the lawsuit mirror the findings of an investigation by the Chicago Tribune, which reported that the state’s biggest scratch-off games didn’t award 40 percent of the grand prizes. …

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Illinois seeking new private manager for state’s lottery
Source: Sophia Tareen, State Journal-Register, July 28, 2016

Aiming to avoid past troubles, Gov. Bruce Rauner announced Thursday that the state is seeking bids for a new private manager to run the Illinois Lottery after moving to terminate Northstar Lottery Group’s contract last year. State officials released a request for proposal on a new 10-year, $300 million contract with revamped terms geared at a wider swath of companies. … Lottery officials said it took nearly a year to start the search for a new manager because of complexities in crafting the contract. New terms include a push to expand technology, paying up-front licensing fees, complying with the Freedom of Information Act and not allowing the private manager to act as both a manager and supplier. Northstar won’t be able to bid, under the termination agreement. Lottery proceeds go to public schools and capital projects. Privatization, with the state retaining ownership and regulatory oversight, was pushed by state legislators as a way to help boost revenues. However, the 2010 selection process for a 10-year contract raised questions about transparency. Northstar was made up of two lottery vendors running machines and instant tickets. … Northstar will continue running the lottery until January 2017, but state lottery officials said that could be extended if the new company isn’t in place. …

Gov. fires private manager of Illinois Lottery amid mismanagement
Source: Natalie Craig, Columbia Chronicle, August 15, 2014

In the wake of Gov. Pat Quinn’s firing of the private firm operating the Illinois lottery, further evidence has come to light that the state’s choice of the company, Northstar, was out of compliance with Illinois law in the first place. An investigation over the past several months by The Chronicle has shown that since the privatization of the Illinois Lottery in 2011, Northstar has failed to produce projected profits and has not held required Lottery Control Board meetings since assuming control of the state lottery’s daily operations.

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Judge sides with House speaker in lawsuit in Florida Lottery contract dispute with Scott administration

Source: Associated Press, March 8, 2017

In a move that could escalate tensions further among Florida’s Republican leaders, a Tallahassee judge on Tuesday sided with House Speaker Richard Corcoran in a lawsuit that contends the administration of Gov. Rick Scott approved an illegal contract. Circuit Judge Karen Gievers on Tuesday ruled the Florida Lottery lacked the legal authority to sign off on more than $700 million contract with IGT Global Solutions to run lottery games. Gievers declared the contract, which is supposed to run until 2031, “void and unenforceable.” … Corcoran sued the state’s lottery secretary last month, arguing that the contract approved last fall exceeds the Florida Lottery’s authorized budget. During a daylong hearing on the lawsuit held this week, top aides who work for the Florida House also testified that the contract also was structured in a way to sidestep legislative oversight. They noted that lottery officials last fall asked legislators for more money to pay for the contract. … Florida had a contract with Gtech, one of the world’s leading lottery operators. It merged with International Game Technology and changed its name, and IGT Global Solutions is a subsidiary. State records show the old contract — which started in 2005 — was worth roughly $387 million. The new contract is worth as much as $717 million. …

What’s the future of Ohio Lottery? Maybe ‘quasi-public’ and online gambling

Source: Alan Johnson, Columbus Dispatch, September 26, 2016

Changes could be coming for the Ohio Lottery, including adding electronic table poker, online gaming, and a greater variety of instant tickets. Those are among the recommendations from Spectrum Gaming Group, a New Jersey research and professional services firm, hired by the Kasich administration to produce a business assessment of the Ohio Lottery, now 42 years old. The study cost $601,600, according to documents from the Department of Administrative Services. The lottery should become a “quasi-public” corporation, operating more efficiently and avoiding unnecessary government regulation, according to a copy of the study obtained by The Dispatch. Spectrum does not recommend turning the lottery private, but concludes that the current structure, which operates out of the governor’s office, is inefficient, slow to react to market conditions and subject to too much “control and oversight” by several state agencies and state lawmakers. It would be organized much like JobsOhio, Kasich’s privatized economic development agency, with a board appointed by the governor. … The idea in the Spectrum report is not new. Semi-privatization was recommended by then-state Auditor Mary Taylor in 2010 and Gov. John Kasich suggested privatizing the agency in his first budget in 2011, but the General Assembly did not go along with the proposal. Among other recommendations are allowing video poker and electronic table games at seven racinos at horse race tracks, possible expansion into online gaming, expanding instant games, and beefing up the assistance program for problem gambling. …

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Ohio Lottery to undergo independent efficiency assessment
Source: Associated Press, September 26, 2015

Ohio Lottery officials say they’re planning to hire a consultant to study how the agency can operate more efficiently but insist there aren’t any plans for privatization. Northeast Ohio Media Group reports the study will include an examination of privatized lottery operations. A lottery spokeswoman says state law doesn’t allow for privatization of the agency. … Officials say the assessment will focus on ways to make the lottery more efficient and to identify ways to generate more funds for education.

Could the Ohio Lottery become privatized? A consultant will look at all options
Source: Karen Farkas, cleveland.com, September 22, 2015

The Ohio Lottery will undergo an independent assessment to determine how it can operate more efficiently and maximize revenues. Officials said that does not mean the lottery will become privatized, although all models – including privatized lottery operations – will be studied. … Among the consultant’s duties will be to “analyze the state lottery industry in other relevant or similar jurisdictions including the organizational, operations and management structures and effectiveness,” the proposal states. “Models of interest are current arrangements that include, but are not limited to, California, Illinois, Indiana, Massachusetts, and New Jersey,” Those state lotteries are privatized – and the path has not always been smooth. In August, Illinois Gov. Pat Quinn fired Northstar Lottery Group, the private company that runs the Illinois Lottery, after it fell nearly a half billion dollars short of revenues it promised to raise for the state during the first three years of a 10-year contract, the Chicago Tribune reported. Northstar New Jersey, which operates the New Jersey Lottery, is under fire for not meeting income targets, USA Today reported.

State seeks review of Ohio Lottery, but won’t pursue privatization
Source: Jay Miller, Crain’s Cleveland Business, September 3, 2015

It appears that the Kasich administration is at least looking to revamp, but not privatize, the Ohio Lottery. The Ohio Department of Administrative Services on Aug. 24 posted a request for a consultant to independently assess the operations, management and government structure of the $3.3 billion Ohio Lottery. The goal, according to the formal request for proposal, is for a report that analyzes how best “to achieve the highest financial return to the state from lottery gaming offerings and to obtain efficiencies in operations and management of the Ohio Lottery Commission.” Early in his administration, Gov. John Kasich had considered privatizing lottery operations. … The state contract should be awarded in the fall with a report on lottery operations due back to the lottery commission in late spring or early fall, Frizzi-Babb said.

Wording aside, state has no intent to privatize lottery
Source: Randy Ludlow, The Columbus Dispatch, September 2, 2015

While a document labels privatized lotteries in other states as “models of interest,” state officials said today that there are no plans to privatize the Ohio Lottery Commission. A state request for proposals on Aug. 24 seeks a consultant to conduct a far-reaching review of the lottery and recommend ways to contain costs and maximize profits, which largely are routed to public schools. One section of the document states that “models of interest” to be studied include the lottery systems in Illinois, Indiana, Massachusetts and New Jersey – all of which have privatized lotteries. … The goal of hiring the consultant is to undertake a business study of the lottery’s operations and make improvements to generate more money for schools, she said. … Theis said the privatization of lotteries in others states, including those in which Ohio is expressing interest, have been problematic, largely failing to meet promised sales and revenue figures.

Ohio Senate budget bill includes lobbyist legislation on privatizing Ohio Lottery
Source: Mark Naymik, The Plain Dealer, June 02, 2011

The company winning the contract to manage the Ohio Lottery would receive a 10-year deal and a yearly management fee of up to 5 percent of the lottery’s total revenue. The Ohio Senate’s latest version of the state budget bill includes language to privatize the Ohio Lottery that is nearly identical to legislation drafted by a gaming company hoping to manage the $2.5 billion agency’s day-to-day operations.

State Democrat, pair of Ohio Lottery officials bemoan plan to privatize the agency
Source: Reginald Fields, The Plain Dealer, June 16, 2011
Privatization of lottery rejected in state budget bill / It’s one of many changes adopted for $56B budget
Source: Julie Carr Smyth, The Associated Press, Tuesday, June 28, 2011

CSEA declares end of GTECH contract at Lottery

Source: Times Union, February 26, 2015

CSEA declared victory recently when the last contract worker recently left a pilot program at the Lottery Division. The union reported in its magazine Work Force that state officials awarded GTECH — an Italian multi-billion-dollar company that manages lotteries worldwide — a $25 million contract in September 2012 to create a pilot program that had private sector workers do jobs identical to those of civil service workers at the Division. ….
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CSEA: Lottery Outsourcing Jobs To Firm That’s Big Cuomo Contributor
Source: Mark Toor, Chief Leader, December 16, 2013
(subscription required)

The Civil Service Employees Association is redoubling its efforts to fight a pilot program by the State Lottery to hire employees of a private company to do the work usually done by civil-service Lottery Marketing Representatives. The union has opposed the program since summer but has made no progress, said CSEA spokesman Stephen Madarasz….The company, GTECH, is a multi-billion-dollar international corporation that manages lotteries around the world. GTECH’s political-action committee had contributed $40,000 to Mr. Cuomo as of last January, according to the New York Public Interest Research Group…. “It’s a sign of the times, this outsourcing,” he told THE CHIEF-LEADER last week. “It’s costing more and you’re not getting better service. In the long run, even with the health-care and pensions, civil service is still cheaper.” He noted that the GTECH representatives “sell less tickets, and they make less money.” A CSEA official who asked not to be named said that “every time one of our members leaves they put in a GTECH person…It’s this huge company coming in and taking over state jobs in New York City. Eventually they’ll probably spread out across the state.” … Mr. Skoufis wrote a letter Dec. 11 to Gardner Gurney, Acting Director of the State Lottery, asking why the agency was hiring workers from GTECH instead of civil-service Lottery Marketing Representatives. …

CSEA seeks ethics probe / Request targets former director of Division of Lottery
Source: James M. Odato, Times Union, May 6, 2013

The head of the contract administration for the Civil Service Employees Association has formally requested a state ethics probe of the former director of the Division of Lottery. Ross Hanna requested the investigation because Gordon Medenica took a job as a consultant for GTech, the major lottery services contractor that received a $25 million contract shortly before Medenica resigned his Lottery position….

CSEA wants Medenica hiring investigated
Source: Casey Seiler, Times Union, Capitol Confidential blog, April 17, 2013

CSEA wants to see the hiring of former State Lottery Director Gordon Menedica by GTech Corp., the Lottery Division’s biggest vendor, investigated by the Legislature, the Inspector General and the Joint Commission on Public Ethics. Medenica’s new job was the subject of Jim Odato’s column on Monday, though somehow CSEA fails to mention that in their release. In that article, Medenica noted that he waited 30 days before pursuing the job, and says that GTech will use him as a consultant in New Jersey, Illinois and Indiana, but not in New York.

Up to 180 state-worker jobs at stake in lottery bills

Source: Justin A. Hinkley, Livingston Daily, February 10, 2015

Up to 180 state-worker jobs could be privatized under a pair of bills recently introduced in the Legislature. The bills — one in each chamber — would require state Lottery Commissioner M. Scott Bowen to seek bids from private companies for management of the state lottery, though the legislation wouldn’t require the commissioner to accept those bids. Both bills were just referred to committee and haven’t yet had a hearing. … Holyfield said the Lottery Bureau hadn’t yet analyzed the bill and took no position on it. But he noted already 97 cents of every state lottery dollar directly benefits Michiganders. Last fiscal year, he said, the lottery put nearly $743 million into the School Aid Fund, paid retailers $188 million in commission and paid winning Michiganders $1.6 billion. Schmidt’s Senate bill was referred to the Senate Regulatory Reform Committee and was co-sponsored by four Republicans. Poleski’s House bill was referred to the House Commerce and Trade Committee and had no co-sponsors. …

The Round-Robin of State Lottery Exploitation

Source: Sebastian Johnson, Citizens for Tax Justice and Institute on Taxation and Economic Policy (ITEP), Tax Justice blog, February 4, 2015

Lotteries have been with us since the early years of the Republic. They were corrupt and a poor way to raise revenue then, and today they’re not much better. … It isn’t just retailers getting in on the fraud. In states that have turned to private contractors to administer their lotteries, the companies have failed to deliver on wildly exaggerated claims of revenue growth. Last year, former Illinois Gov. Pat Quinn was forced to fire Northstar, the firm operating the state lottery after it failed to deliver $400 million in promised profit over three years. Despite that abysmal track record, New Jersey Gov. Chris Christie hired the same firm to take over New Jersey’s lottery; unsurprisingly, Northstar New Jersey missed its income target by $55 million, and revenues were 7.9 percent lower compared to the same period the previous fiscal year (under state management)….

Planning for a Payout: Effectiveness of Special Purpose Entities as State Lottery Administrations

Source: Daniel L. Fay, American Review of Public Administration, Published online before print December 15, 2014
(subscription required)

From the abstract:
Public management literature has previously examined privatization in which government contracts with private firms or other organizations to provide goods or services to the public. However, privatization of organizational structure through the creation of special purpose organizations remains relatively underexplored. This study examines the policy consequences of privatizing state lottery organizations by comparing the revenue returned to state governments from lotteries managed by independent state agencies to lotteries managed by privatized special purpose organizations. Using data on the organizational structure and revenue returns of the state lottery administrations in the United States from 1985-2008, fixed effects analyses demonstrate that independent state lottery agencies are more effective than privatized special purpose administrations. The revenue costs of lottery administrative privatization are robust to multiple measurements and specifications, and suggest that choosing a privatized organizational structure can cost states tens of millions of dollars in lost lottery revenue annually. Special purpose lottery administrations maximize returns to state governments in average-sized states with low African American populations. State-agency lottery administrations maximize returns to state governments in small- or large-sized states with high per capita income and high population density. Implications of state special purpose administrations and future research opportunities are discussed.

Pa. Lottery outsourcing critics say Illinois’ failed privatization could have played out here

Source: Jan Murphy, pennlive.com, August 25, 2014

After three years of revenues falling short of expectation, Illinois is parting ways with the private management firm it hired in 2010 to run its state lottery. The news of Illinois’ decision to divorce Northstar Lottery Group announced on Friday struck a chord with a Pennsylvania labor union official and others who had been critical of a similar pursuit by Gov. Tom Corbett to hand over the reins of the Pennsylvania Lottery to a private management firm. Corbett abandoned that privatization pursuit, at least for the time being, when he announced at the end of 2013 that he was allowing a bid from United Kingdom-based Camelot Global Services to expire after extending it eight times over the course of a year. That decision came after Attorney General Kathleen Kane raised constitutional and legal objections about the proposed contract with Camelot….
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Editorial – Bet on politics: The new lottery director has scant expertise
Source: Pittsburgh Post-Gazette, January 15, 2014

When the Corbett administration was promoting its now-abandoned idea of privatizing the Pennsylvania Lottery, it was on the basis of not only bringing private enterprise know-how to its operations but also special expertise in gambling. As explained a year ago by Revenue Secretary Dan Meuser, in an email to lottery workers informing that a British firm, Camelot Global Services, would soon be signing a contract: “We’re confident that by combining one of the nation’s best lotteries with one of the best private-sector lottery industry experts in the world, we’ll end up with a win-win proposition to grow and protect lottery profits … .” Now it’s on to other things, such as filling the vacant position for the lottery’s new executive director. On Monday, Silvan B. Lutkewitte III, 50, of Hershey took up the position, replacing Todd Rucci, who left in November for another job. In picking Mr. Lutkewitte to head the lottery instead of conducting a national search, did the administration put the same premium on gambling expertise as it did in its privatization efforts? …

Corbett feeling lucky about lottery privatization
Source: Mary Wilson, WITF, January 6, 2014

The Corbett administration let a private firm’s bid to manage the Pennsylvania Lottery expire at the end of December, but that doesn’t mean the governor feels down on his luck about privatizing the enterprise eventually. State senators last month began considering legislation that would allow the governor’s plans to advance. A measure under discussion would pave the way for an expansion of lottery games and outsourcing the lottery’s management to a private company.

Lottery workers union ‘pleased’ with end to privatization effort
Source: Robert J. Vickers, pennlive.com, December 30, 2013

State lottery workers breathed a sigh of relief Monday after Gov. Tom Corbett appeared to give up on a two-year effort to privatize the management of the Pennsylvania Lottery. “Right now we’re just pleased they’re keeping everything in-house,” said David Fillman, executive director of AFSCME Council 13, the union that represents about 170 employees of the state lottery. Earlier in the day, Corbett issued a news release indicating that he would not pursue a ninth extension on the lottery management bid from UK-based Camelot Global Services.Although he said he would allow the lottery to run as-is, and a state aging official said the move wouldn’t immediately harm commonwealth seniors, another administration official said future privatization efforts could be on the cards….

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Pa. lottery manager effort has clear path
Source: Karen Langley, Post-Gazette, December 4, 2013

A tentative agreement between the Corbett administration and a union representing state workers appears to have breathed new life into the governor’s effort to hire a private manager for the Pennsylvania Lottery. A 20-year management agreement with Camelot Global Services, which operates the United Kingdom’s lottery, has been stalled since February, when Attorney General Kathleen Kane announced that attorneys conducting a routine review of contracts had concluded the deal would violate state law. …

AFSCME warming up to outsourcing of Pennsylvania Lottery’s management
Source: Jan Murphy, pennlive.com, December 4, 2013

The most vocal critic of Gov. Tom Corbett’s proposed privatization of the Pennsylvania Lottery’s management may be backing off its opposition. …

Privatizing Pa. Lottery doesn’t add up
Source: Mercury, November 1, 2013

From the outset, Gov. Tom Corbett’s proposed privatization of the state lottery was ill-fated. And for good reason: It was a bad idea. It’s bad public policy. It’s bad for state taxpayers. It’s bad for the senior citizens who depend on lottery funds to pay for transportation, meals, prescription drugs and property tax and rent rebates. But now we learn the governor’s quixotic quest — guided by ideology more than practicality — hasn’t been bad for everyone. Consultants have hit the jackpot. …

Auditor General Eugene DePasquale calls on Corbett to stop spending on lottery privatization consultants
Source: Jan Murphy, pennlive.com, October 29, 2013

State Treasurer Rob McCord may have reluctantly decided to pay the more than $3.4 million in bills associated with Gov. Tom Corbett’s exploration of privatizating the Pennsylvania Lottery’s management, but that is not going to stop state Auditor General Eugene DePasquale from giving them another once over. In a news release issued Tuesday, DePasquale said he directed his staff to immediately begin to review and scrutinize this diversion of use of Lottery Fund dollars from funding senior programs to paying for consultants. …

Auditor General DePasquale Will Scrutinize Payments of Lottery Funds Diverted to Firms Associated with Stalled Privatization Effort
Source: Commonwealth of Pennsylvania, Department of the Auditor General, News Release, October 29, 2013

Auditor General Eugene DePasquale today released the following statement on the commonwealth’s diversion of more than $3.4 million to firms associated with the Corbett Administration’s effort to privatize the Pennsylvania Lottery: “I directed Department of Auditor General staff to immediately begin to review and scrutinize the Corbett Administration’s diversion of more than $3.4 million in Lottery funds to firms associated with a still-pending contract with the British-owned Camelot Global Services Inc. to privatize the Pennsylvania Lottery management. “Funds from the Pennsylvania Lottery are supposed to help older Pennsylvanians with prescriptions, transportation, home-delivered meals and property tax and rent rebates, not to fatten the coffers of law firms and private consultants over a Lottery privatization contract that may never see the light of day…

2 State Senators Want Corbett to End Lottery Privatization Bid
Source: Kevin Gavin, WESA, October 7, 2013

Two Democratic state senators want Gov. Tom Corbett to pull the plug on his efforts to privatize Pennsylvania’s Lottery and turn his attention to what they say are more pressing issues including transportation funding, Medicaid expansion and education funding.

UK-based Camelot Global Services’ original bid to operate Pennsylvania’s Lottery was to expire at the end of 2012, but the Corbett administration and the company agreed on an extension of the offer. A contract was then finalized Jan. 16 which called for Camelot to give the state $34.6 billion over 20 years. In exchange Camelot would be allowed to increase the gaming options including Keno.

However, 30 days later state Attorney General Kathleen Kane rejected the contract Thursday on the grounds it violates the state constitution and state law. Since then the administration and Camelot have been agreeing to extensions to give the administration more time to “refine contract language.”

The latest extension, the 10th, is set to expire Oct. 29. Sen. Tim Solobay (D-Washington) says there is no public demand for privatization…

Pa. Lottery should not follow Illinois path, lottery outsourcing opponents say
Source: Jan Murphy, pennlive.com, July 23, 2013

…An official from the labor union representing Pennsylvania Lottery employees and Democratic lawmakers have taken notice of how the situation is unfolding in Illinois. They suggest that should serve as yet another reason why Corbett should halt his pursuit of hiring United Kingdom-based Camelot Global Services to manage the Pennsylvania Lottery. In its bid, Camelot committed to generating $34.6 billion in profits over the next 20 years that would be used exclusively to fund the senior citizens’ programs. The Corbett administration estimates that is $3 billion to $4.5 billion more than the lottery would produce by keeping its management in-house. Camelot’s bid is currently set to expire on July 31….

Pa. Lottery privatization costs don’t cut profits, Revenue spokeswoman says
Source: Jan Murphy, pennlive.com, July 19, 2013

The record profits that the Pennsylvania Lottery earned last year do not include the more than $3.5 million that Gov. Tom Corbett’s administration has spent or expects to spend on its exploration of tapping a private company the lottery. A spokeswoman for the Department of Revenue said, however, it would be wrong to assume that had those costs not been incurred, it would have driven up last year’s profits even higher. The lottery reported a record $1.067 billion in profits…. The lottery’s annual report for the period covering July 1, 2012 to June 30 shows the lottery hit an all-time ticket sales record of $3.48 billion, which is 6.3 percent more than the prior year’s record-setting performance….

Lottery privatization pursuit continues despite approaching record-breaking profits
Source: Jan Murphy, pennlive.com, May 20, 2013

Despite a trajectory that shows Pennsylvania Lottery profits on course to break the past year’s record-breaking performance, Gov. Tom Corbett’s administration has not abandoned its effort to privatize the lottery’s management. Administration officials have been working with consultants and lawyers to revise the contract that Attorney General Kathleen Kane rejected in February, because she determined it was unconstitutional….

PA Lottery privatization deal questioned by third state agency
Source: Associated Press, April 15, 2013

A third state agency is pointing to potential legal problems in Governor Corbett’s stalled plan to hire a British company to manage the $3.5 billion Pennsylvania Lottery. The chief counsel of the Pennsylvania Gaming Control Board wrote in a letter last month that the proposed contract is too ambiguous to tell what kinds of new gambling it would allow. As a result, the lawyer, Douglas Sherman, says it’s impossible to say whether it infringes on state casino gambling laws.

Corbett’s lottery privatization tab for consultants nears $3 million
Source: Jan Murphy, pennlive.com, April 2, 2013

Senior citizens may stand to pay a substantial cost in lost services if Gov. Tom Corbett’s effort to privatize the Pennsylvania Lottery’s management goes nowhere. Already, the costs of the consultants hired to assist the Corbett administration in that endeavor exceed $2.85 million, said Elizabeth Brassell, a spokeswoman for the Department of Revenue, which oversees the lottery. Unless another funding source is found, that money will come out of the lottery profits that are used to pay for senior programs, she said.

To understand the impact that would have if it came out of the lottery fund, information available from the state indicates that $2.85 million is enough to:
– Assist seniors in paying for 137,681 prescriptions through the PACE and PACENET programs,
– Pay for 1.1 million free transit rides for seniors,
– Provide 6,055 rebates through the state’s property tax and rent rebate programs, or
– Cover 576 months of nursing home care, the equivalent of paying the tab for 48 people to stay in a nursing home for a year….

Pennsylvania lottery deal being revised to address attorney general’s concerns
Source: Karen Langley, Pittsburgh Post-Gazette, March 16, 2013

…With an appeal to the courts due today, the governor’s office announced late Friday it would revise the contract “in order to provide clarification to the attorney general.” The attorney general had raised three objections to the contract: that it infringes on the Legislature’s power to make policy; that state lottery law does not allow monitor-based games, like keno; and that it included too broad a provision for Camelot to make claims against the state. The administration does not plan to remove keno or other components of the contract, but rather to demonstrate that the agreement is lawful….

Treasurer Rob McCord favors expanding lottery before looking to privatize its management
Source: Jan Murphy, pennlive.com, February 20, 2013

…At a Senate budget hearing, McCord suggested the administration would have done better had it had an open conversation with the Legislature about expanding the lottery to include terminal-based games such as keno at the same time it was looking at the idea of privatizing the lottery’s management….

Attorney General Kathleen Kane says Gov. Tom Corbett overstepped his constitutional authority in signing the lottery contract
Source: Jan Murphy, pennlive.com, February 14, 2013

Attorney General Kathleen Kane says Gov. Tom Corbett overstepped his authority in signing a contract with Camelot Global Services PA, LLC to take over management of the Pennsylvania Lottery. But that wasn’t the only reason she rejected it. She cited the state lottery act, the gaming act and other applicable case law as reasons why the contract didn’t meet her test for form and legality….

Toohil backs Kane on lottery contract block
Source: Kent Jackson, citizensvoice.com, February 19, 2013

AFSCME Urges Gov. Corbett To Negotiate With PA Employees On Lottery Proposal
Source: AFSCME Council 13, February 19, 2013

Costa, Blake to Gov: Let Lottery Implement AFSCME Approach to Raise Profit
Source: State Sen. John Blake, Press Release, February 11, 2013

State Sens. Jay Costa (D-Allegheny) and John Blake (D- Lackawanna/Luzerne/Monroe) said that instead of outsourcing the Pennsylvania Lottery’s operations to a U.K. company, Camelot Global Services, the governor should allow the Lottery to implement AFSCME’s recommendations to raise new revenue….

Poll: Voters say don’t privatize lottery management
Source: Borys Krawczeniuk, Scranton Times Tribune, February 7, 2013

Pennsylvania voters overwhelmingly think privatizing management of the state lottery is a bad idea, with some saying they’ll no longer play if that happens, according to a new Franklin & Marshall poll released Wednesday…Fewer than one in five voters (18 percent) said they either strongly or somewhat favor Gov. Tom Corbett’s plan to hand off management of the lottery to a private company. Almost two-thirds (64 percent) either somewhat or strongly oppose privatization….

AFSCME adds new arguments in its lottery privatization lawsuit
Source: Jan Murphy, pennlive.com, February 04, 2013

…The American Federation of State, County and Municipal Employees Council 13 on Thursday amended its lawsuit in Commonwealth Court to provide two additional reasons why it thinks the court should stop the administration’s outsourcing of the lottery’s management….

Corbett Gives U.K. Firm 20-Year Pennsylvania Lottery Deal
Source: Romy Varghese, Bloomberg, January 17, 2013

Pennsylvania Governor Tom Corbett handed the management of the state’s $3.48 billion lottery to the company that runs Britain’s National Lottery. Disregarding criticism from Democratic lawmakers and a union representing lottery workers, Corbett awarded the 20-year contract yesterday to Camelot Global Services PA LLC, which is part of U.K.-based Camelot Group Plc. The attorney general’s office received the contract yesterday and will have 30 days to review it, Eric Shirk, a spokesman for the governor, said by e- mail. …

Inside the Bid to Privatize the PA State Lottery
Source: Randy LoBasso, PhillyNow blog, January 15, 2013

British firm wins Pennsylvania Lottery management
Source: Paul J. Gough, Pittsburgh Business Times, January 14, 2013

It’s official: Pennsylvania will become the third U.S. state to have a private firm run its lottery. Camelot Global Services, which also runs the British lottery, will pay $34 billion over the next 20 years to run the Pennsylvania Lottery. …

Pennsylvania lottery workers’ union pitches own plan
Source: Laura Olson, Post-Gazette, January 9, 2013

Arguing that the state is comparing “apples to screwdrivers” in weighing a private company’s plan for boosting state lottery profits against the projected performance of public employees, a union representing lottery workers says it can beat the bid. In a proposal submitted Tuesday to Gov. Tom Corbett’s administration, the American Federation of State, County and Municipal Employees Council 13 contends that the bid from Britain-based Camelot Global Services PA LLC would provide less funding for seniors programs and too little security against missing its profit margins. …

Union fights effort to privatize Pa. Lottery
Source: Amy Worden, Philadelphia Inquirer, January 9, 2013

Unionized employees make Pa. Lottery pitch
Source: Marc Levy, Associated Press, January 9, 2013

Union say lottery privatization could be costly
Source: Melissa Daniels , Watchdog.org, January 8, 2013

Pennsylvania Lottery privatization Q&A: Secretaries of aging and revenue discuss Camelot Group bid3
Source: John L. Micek, Morning Call, January 8, 2013

…. Pennsylvania Revenue Secretary Dan Meuser and Aging Secretary Brian Duke took a few minutes to talk about the proposed privatization and the bid submitted by a North American subsidiary of the Camelot Group, which runs the National Lottery in the United Kingdom….

Corbett may hold hearings on privatizing the state lottery
Source: Laura Olson, Pittsburgh Post-Gazette, December 20, 2012

Lawmakers, union tiring of ‘secret’ talks on lottery privatization
Source: Mark Shade, Times Online, December 14, 2012

Editorial: More questions than answers in lottery deal
Source: Dave Fillman, Times-Tribune, December 16, 2012

State’s financial adviser doesn’t hide connection to only bidder for Pennsylvania lottery
Source: Jan Murphy, Patriot-News, December 06, 2012

A firm hired to advise Gov. Tom Corbett’s administration in its pursuit of privatizing the Pennsylvania Lottery management is no stranger to the company interested in taking over the lottery. The state’s financial adviser, Greenhill & Co., worked on the $576 million sale of the Camelot Group to its present owner, the Ontario Teachers’ Pension Plan, in 2010. One of Camelot’s companies, Camelot Global Services PA, was the only firm to submit a bid to take over running the state’s $3 billion-plus lottery enterprise for the next 20 to 30 years. Now both Greenhill, which has a financial incentive in its contract if the lottery’s management goes private, and Camelot stand to make millions if Corbett signs the privatization deal.

Pa. Auditor General-elect Eugene DePasquale questions the urgency in the Corbett Administration’s lottery management privatization discussion
Source: Jan Murphy, Patriot-News, December 06, 2012

Pa. House Democratic lawmakers blast away at Gov. Tom Corbett’s lottery privatization proposal
Source: Jan Murphy, Patriot-News, December 03, 2012

More questions than answers on lottery privatization
Source: Sen. Richard Kasunic, Daily American, November 29, 2012

…Last year alone, the lottery generated $3.48 billion in sales, reaping over $1 billion in profits – all dedicated to senior citizen programs, which was an increase of over 10 percent from the previous year. The lottery managed to achieve these record sales despite increased competition from casinos and other gaming offerings across our state. Without question, the lottery is one of the most well run, efficiently operated agencies in all of state government.

With this record of success, why has our governor been quietly seeking to outsource the lottery’s management, and hurry this closed-door process along with little public review or legislative scrutiny? The governor stated that he wants a private operator in place by the beginning of January.

Making matters worse and adding to a laundry list of already legitimate suspicions about this privatization process, we now learn that only one firm has bid to run our lottery. Citing concerns about the terms of the Private Management Agreement and the process, two other potential bidders bowed out in August and November, leaving British-based Camelot as the sole bidder. This lack of competition raises serious issues about the model the Corbett administration has chosen to solicit privatization proposals and begs the question of whether Camelot’s bid reflects the best deal we can get if we are going to continue down this misguided path…..

Pa. unveils $34B, 20-year bid to privatize lottery
Source: Marc Levy, Associated Press, November 21, 2012

The Britain-based company that runs the national lottery in the United Kingdom is pledging to produce more than $34 billion in profits over 20 years if it wins a contract to manage the Pennsylvania Lottery, Gov. Tom Corbett’s administration said Tuesday as it moves toward privatizing the state’s $3.5 billion system. The administration said it will weigh the offer by Camelot Global Services, which it said is good until Dec. 31, and is the only one it said it will receive after two other companies that it would not identify dropped out.

Privatize the lottery? Corbett administration moves forward with efforts
Source: Nick Malawskey, Patriot-News, November 09, 2012

As lottery privatization decision looms, another state offers advice
Source: Megan Lello and Radio Pennsylvania, WITF, August 8, 2012

Pennsylvania is currently looking into privatizing its lottery. But one official with the Illinois lottery, the only private system in the nation, is warning the commonwealth to carefully plan how it would choose a company to manage day-to-day operations.

Could the Pennsylvania lottery be privatized?
Source: Jan Murphy, Patriot-News, June 16, 2012

PA Lottery latest target in privatization campaign
Source: Mary Wilson, WITF, April 2, 2012

Pennsylvania exploring lottery privatization
Source: John L. Micek, Morning Call, April 2, 2012

Corbett eying private lottery manager
Source: Associated Press, March 31, 2012

Gov. Tom Corbett is taking steps toward hiring a private company to run the Pennsylvania state lottery, the latest move by the Republican to shift state services to the private sector….Last year, a private group that includes GTECH and Scientific Games took over management of Illinois’ lottery with promises to boost sales and revenue. The group gets a $15-million-a-year management fee and a percentage of profits it produces above a certain level….