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Corbett announces PA will not extend lottery private management agreement bid

Updated: Monday, December 30 2013, 03:05 PM CST
Posted by: Lauren Gross

HARRISBURG -- Gov. Tom Corbett announced today that the commonwealth and Camelot Global LLC will not continue to pursue the lottery private management agreement, and his administration will continue to fight for the best interests of the older Pennsylvanians by looking for other ways to grow revenue.  

"We have decided not to extend Camelots bid for the lottery private management agreement first reached over a year ago," Corbett said. "As we move forward, we will take what we've learned to make our successful lottery even better--expanding the player and retailer base, improving player loyalty, and implementing strategies that will grow our lottery, responsibly and efficiently."

"I want to thank the teams for the hard work and effort," Corbett said. "Our continued goal is to ensure a growing, predictable revenue stream for senior programs to meet the growing demand, and we will continue to work with all stakeholders and interested parties to explore new ways to harness market resources to enhance our lottery's continued success."

In April 2012, the commonwealth began the competitive procurement process to engage a private manager to run the Pennsylvania Lottery.

Last November, it announced Camelot Global, LLC, a global leader in the lottery sector, as the selected vendor and awarded the contract. However, the process was later challenged by the Attorney General, prompting several extensions of the bid.

Pennsylvania initially pursued a contract for management services to assure a more predictable and growing revenue source for older Pennsylvanians and to keep up with the anticipated demand for our growing senior population.  

Through a competitive procurement, Pennsylvania awarded the management agreement, which would have assured at least $34.6 billion in profit -- an increase of up to $5 billion -- that could have been invested in senior programs throughout the life of the contract. This was significantly greater than this years profit growth of $6 million, and could have met growing demand for services for senior citizens.   

The Pennsylvania Lottery was created in 1971 to generate funds for programs benefiting older adults.

Auditor General Eugene DePasquale today applauded Gov. Corbett’s decision today to abandon efforts to privatize the Pennsylvania Lottery.

“We should always look for ways to make government better,” DePasquale said. “But in this case, our lottery is one of the most efficient in the country.

Today’s decision means that all of the lottery proceeds will continue to go toward funding programs and services for senior citizens.”

Earlier this month the Department of the Auditor General issued a report on its review of the contract reimbursement for private firms hired to help manage the lottery privatization effort.

That review found the costs for three privatization consultants soared from the original $725,000 to an estimated $4.6 million. 

State Sen. Rob Teplitz today said the governor’s failed efforts to privatize management of the Pennsylvania Lottery wasted millions of dollars that could have been used to support senior citizens.

The governor announced today that he would halt his privatization efforts, just one day before the 11th extension of the bid was set to expire.

“I’m relieved that this unwise venture has finally come to an end, but it’s come at a hefty cost,” said Teplitz (D-Dauphin/York). “It wasted millions of dollars on private consultants, in some cases reimbursing them for dining and mileage at the expense of our seniors.”

Corbett’s failed privatization attempt cost taxpayers an estimated $4.6 million, according to data released by the Department of Auditor General. That money could have gone toward senior nutrition programs, which suffered from the federal sequestration earlier this year, Teplitz said.Corbett announces PA will not extend lottery private management agreement bid

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