British Company Set To Run Pa. Lottery

A British company poised to manage the Pennsylvania Lottery plans to boost the bottom line by getting more people to play lottery games.

By Melissa Daniels | PA Independent

HARRISBURG — A British company poised to manage the Pennsylvania Lottery plans to boost the bottom line by getting more people to play lottery games.

But some lawmakers are skeptical.

Senate Finance Committee Minority Chairman Sen. John Blake, D-Lackawanna, said he still has reservations about the Corbett administration’s pursuit of a private management agreement with Camelot Global Services, even after a four-hour hearing Monday.

The process was done without legislative oversight, and that worries Blake.

“This is a scale of a decision that probably should’ve been, I would’ve preferred and I think the leadership in my caucus and many members in my caucus would’ve preferred, was something that was put to the vote by people who represent 12.5 million Pennsylvanians and that’s the General Assembly,” Blake said.

Yet the deal is going ahead under the umbrella of the administration. The contract with Camelot hasn’t been signed and finalized, but that’s expected within the week. Friday, the administration submitted a “notice of award,” publicizing the intent to finalize the deal.

Senate Finance Committee Chair Sen. Mike Brubaker, R-Lancaster, was impressed with Camelot’s testimony. The hearing, he said, achieved its mission of getting on-the-record statements and giving the procurement process “the light of day.”

Camelot sent two of its top officials to the Harrisburg hearing. They gave a brief history of the company, touting its worldwide status as an industry leader. Camelot does not operate any lotteries in the U.S., but it has served as a consultant in California and Massachusetts.

Alex Kovach, managing director at Camelot who is handling the Pennsylvania operation, said about 30 percent of Pennsylvanians play the lottery weekly, according to Camelot’s research. In the United Kingdom, where Camelot runs the National Lottery, that figure is about 50 percent.

Cultural differences aside, Camelot thinks it can get more Pennsylvanians to play.

“There is a market currently not being focused on,” Kovach said.

Camelot plans to reach out to infrequent or lapsed players with expanded retail locations, and to “reduce barriers” to playing. The business plan includes introducing monitor-based games, such as Keno, to help grow profits.

The goal is to get “a lot of people playing a little, rather than a few people playing a lot,” Kovach said.

Dianne Thompson, Camelot’s chief executive officer, pointed to a promotion in the United Kingdom that created “100 millionaires in one night.”

Pennsylvania Lottery profits fund programs for senior citizens, such as property tax rebates, at-home meal services and prescription drug benefits. It’s the only lottery in the nation with such a setup.

Pennsylvania’s elderly population is growing, and the state is looking to grow the lottery. The state’s executive branch points to Camelot’s “annual profit commitments” as a means to more consistency.

Secretary of Revenue Dan Meuser said commitments from Camelot are guaranteed and exceed any profit estimations made by the state. In the next five years, the state-run lottery would generate $30 million, Meuser said. Under Camelot, the commonwealth could see $1.2 billion.

Camelot will put up $200 million in collateral in case it doesn’t meet it its estimates. No such guarantee exists for any other state lottery, according to Camelot.

Total profits of about $34 billion are guaranteed over the life of the 20-year contract. The state says that figure is about $3 billion to $4.5 billion more than the state would generate, if it expanded games in a similar fashion.

State Sen. Rob Teplitz, D-Dauphin said after the hearing he is still unsure about the process in approving Camelot, which “seemed very sincere” when assuring lawmakers it would retain as many as employees as possible.

Teplitz isn’t sold.

His district includes about half of the lottery’s current employees, and there’s nothing in the Camelot contract to assure their continued employment, he said.

“I was happy to start getting answers, but I’m still skeptical,” Teplitz said.

Contact Melissa Daniels at melissa@paindependent.com

marc vanic January 20, 2013 at 01:33 AM
just read this again and it blows my mind,we are presently bringing in 30 million over 5 years and they will bring 1.2 billion in 5 years? sounds like bernie madoff is in charge of that company although i think that goal is even too lofty for him.i want that contract totally made public and their 200 million in an escrow account and if they fall one nickel short on the fifth year we keep it all and send them packing, i cant believe their arent thousands of pennsylvanians contesting this!!!hey harrisburg the brooklyn bridge is for sale take a look at it next time you are partying there on our dime!!!
mark wood January 20, 2013 at 04:33 PM
I suppoted that damn liar, no more, check your gas prices lately, How about the new increase in gas tax coming you way. I have voted my brains out for DECADES!!! and this is what we get? screw voting, its lame and corrupted. Vote yourself out of all you hold dear. Good bye and bad luck to all of you.
Carl W January 21, 2013 at 12:58 AM
Christ, it's a GLOBAL company, being considered to run the PA. lottery, Rich, not the Pentagon !!!
Carl W January 21, 2013 at 01:07 AM
Concerned ? Write your Legislators, & Tom Corbett. (I'm curious, how many of you would be upset if a U.S. corporation, that was also global, ran a Canadian or British lottery)???
Peter Maravitch January 22, 2013 at 01:00 AM
A must read is Throw the bums out by Peter Schweizer. You will be amazed at how they benefit from deals like this one. With that promise of what they plan on bringing in financially, I am sure we will have to spend millions on programs to get people off now being addicted to playing the lottery.


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