As Released by the Office of the Governor:

Governor Corbett Announces Pennsylvania Will Not Extend Lottery Private Management Agreement Bid

Will Continue to Fight for the Financial Interests of Older Pennsylvanians.

Harrisburg – Governor Tom Corbett today announced that the commonwealth and Camelot Global LLC (“Camelot”) 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 Camelot’s bid for the Lottery Private Management Agreement first reached over a year ago ” Gov. 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 year’s 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 benefitting older adults. Since 1972, when its first game went on sale, the Pennsylvania Lottery has contributed nearly $23.7 billion to programs that include property tax and rent rebates; free transit and reduced-fare shared rides; the low-cost prescription drug programs PACE and PACENET; long-term living services; and the 52 Area Agencies on Aging, including hundreds of full- and part-time senior centers throughout the state. The Pennsylvania Lottery remains the only U.S. Lottery that exclusively designates all proceeds to programs benefitting older residents. Learn more at www.palottery.com.

Senator Teplitz Responds to Corbett's Statement.

HARRISBURG, Dec. 30, 2013 — 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.

“Pennsylvania prides itself on using our nationally recognized lottery system to provide beneficial programs like property tax and rent rebates, prescription coverage and transportation programs for our seniors,” Teplitz said. “We need to focus on fostering the success of our lottery system in its current form.” Archive Video of Auditor General Eugene DePasquale

Earlier this year, Teplitz introduced legislation that would mirror the state’s Gaming Act by protecting the public from the impact of political and financial influence under a new privatized system.

“If the issue of privatizing management of the lottery resurfaces, we must be prepared to put protections in place right away in order to prevent inappropriate actions,” Teplitz said. “My bill will remain as a precaution in case the administration tries to place this bad bet again.”

Auditor General DePasquale Applauds Decision to End Lottery Privatization Effort.

HARRISBURG – 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.

“I was concerned from the very beginning that the benefits from a private management agreement would not meet or exceed what the current, very well-run Lottery could produce in the same time frame,” DePasquale said.

“I am pleased to see that we will be refocusing our efforts on improving the lottery and revenue for senior programs using existing lottery employees to save money that would have been spent on a private management firm.”

Archive video of Auditor General Eugene DePasquale:

Earlier today Auditor General DePasquale stopped by the Capitol Press Room to discuss the costs associated with efforts to privatize the Commonwealth's Lottery System.

"By the end of this year, Governor Corbett should either resubmit this contract to the Attorney General or drop the whole idea; or, the General Assembly should put the Lottery privatization issue up for a vote. We must move on and stop wasting money that is intended to provide programs for seniors."

Auditor General DePasquale urges end to spending on Lottery Privatization

Video. Auditor General Eugene DePasquale.

Photo/Natalie Cake