PA Lottery May Become Privately Managed

Terms for a potential PA Lottery private management agreement are in the works, according to an e-mail from the governor's office

Editor's note: To read the terms of agreement and a document including a list of frequently asked questions about the agreement, click on the attached PDF files.

The Pennsylvania Department of Revenue will announce later today the terms for a potential private management agreement for the Pennsylvania Lottery -- a deal that reportedly would call for a $150 million upfront payment “to be provided by a private manager," according to an email sent by Gov. Tom Corbett’s office.

Canon-McMillan Patch has obtained a copy of the email in which Andrew J. Ritter Jr., the governor’s executive deputy secretary, said the commonwealth would retain ownership and control of the lottery. The commonwealth would continue to handle specific business responsibilities, while other responsibilities are to be transitioned to a private manager, according to the email.

The email does not spell out the specifics of that proposed division of responsibilities. The private manager would be selected through a bidding process, according to the email.

The email also indicates that the agreement would call for be a 20-year base contract, although performance-based extensions could increase its term to 30 years.

There would also be annual profit commitments for two decades to grow funding for lottery-related programs benefiting older Pennsylvanians, the email indicated.

A call to Department of Revenue's communications department was not immediately returned Friday afternoon.

Country1st November 11, 2012 at 10:03 PM
Yes. It's news. And there's a reason why Corbett put it out on Friday of a long weekend. You simply need to pay attention and realize when you're (and the state) are about to be fleeced. The PA Lottery is a huge asset to the seniors in PA and it's essential that there is no corruption in the system -- yet whomever gets this contract is pretty free of accountability. This is public $$$, not Corbett's to punt to a private buddy.
Bettina November 12, 2012 at 12:22 AM
our State is in the hands of a teabag party republican (corbett)...this is what republicans generally do...they take a big profit (or bonus) for themselves...if there's anything left...then it might get into the hands of folks who need funding/programs.
Bettina November 12, 2012 at 12:25 AM
yes, Corbett applied the same greedy logic by looking the other way with the first Sandusky victim...to have done the honorable thing would have lost him his wealthy friends and campaign dollars. IMPEACH CORBETT NOW !
Robert Applegarth November 12, 2012 at 01:38 AM
Once Corbett punts the lottery to a private firm, is it still really "...public $$$..."? I think not. The last I heard, a private firm is not "...public $$$...". The lottery in Pennsylvania actually dates back to Benny (Franklin) and Georgie (Washington). They both had specific goals to meet for their lotteries and once met, the lottery was ended. The goal of the current lottery system is fantastic; funds to assist senior citizens. What are the goals and controls once the lottery is in private hands? It seems that Susan and Stephen Long might be the forerunners for the award of the contract of the so-called bidding process. Keep in mind that for specific professional services, it is not always mandated that true bidding process is necessary.
Richard Weisgrau November 12, 2012 at 04:36 AM
Making a fair judgment about the lottery deal isn't possible because of the lack of details. We now know that the State will receive $150,000,000 up front and will maintain "control" of the lottery (whatever that means). What we do not know is what the private managers will get in return. Keep in mind that those managers will pay $150,000,000 up front for a 20 year deal. There has to be a silver lining for them somehow 'cause no good business person is sinking that kind of money upfront into a deal without having a big expectation of payoff over the long run. The only way for citizens to be able to make an comparison of the gain/loss possibilities is to know what the State nets from the lottery each year and what it will net each year once such a deal is made. I notice that that information has not been provided. Why is that? Surely the Gov has done that analysis, or has he?
Richard Weisgrau November 12, 2012 at 04:46 AM
Just found some details here: http://www.sacbee.com/2012/11/09/4973734/pennsylvania-determines-key-terms.html Not the $150,000,000 is not a payment. It is collateral to back up the projected revenues over 20 years. What kind of collateral? Who know, but I'd be shocked if it was a cash escrow. So That $150,000, 000 million in revenue that some are touting as a reason to do the deal is not revenue at all. The State cannot spend collateral, and who knowns what the value of that collateral will be 20 years from now when the contract is reassessed? It pays to dig into the details before making judgments.
Bradford J. Crompton November 14, 2012 at 07:32 PM
You can bet your bottom dollar that Tom Corbett will get a piece of the action in some way, shape or form and his pockets will be handsomely lined. Most likely a hand picked private contractor who will grease their palms monthly.
Nick November 14, 2012 at 08:53 PM
Dear Barbara Sherer, Your candidate lost the election. You can stop the imbecilic rhetoric. I didn't convince anyone. This is a story about the PA Lottery, and yet you are so consumed with hate you still had to take a shot at YOUR president.
Richard Weisgrau November 14, 2012 at 11:03 PM
I found some additional information and posted some thoughts to my Patch.com blog here: http://balacynwyd.patch.com/blog_posts/pa-lottery-management-proposal-good-or-sweetheart-deal
Norristown Tall Cedars November 14, 2012 at 11:58 PM
I remember when Gov Rendell was going to privatize the PA Turnpike to a company from Spain.
EARL NELSON November 15, 2012 at 12:30 AM
Did you all forget this is about the LOTTERY? LOL
Robert Applegarth November 15, 2012 at 02:15 AM
I remember alot of things too, but most have nothing to do with the Turnpike or the lottery situation. What is your point?
Stephen Eickhoff November 15, 2012 at 08:28 PM
As usual, the left tells all dissenters to shut up. Debate is not tolerated.
Stephen Eickhoff November 15, 2012 at 08:29 PM
I am definitely disappointed that privatization of the lottery was apparently more important to the administration than privatization of the LCB.
Stephen Eickhoff November 15, 2012 at 08:30 PM
Steal from seniors? Only if they're buying lottery tickets.
John McCriminal Jr November 15, 2012 at 08:42 PM
Why not let McGrath Homes manage it? That way seniors can pay a bunch of money for promises and get nothing
Country1st November 15, 2012 at 09:18 PM
So we know that $150million is a joke in terms of amount per annual Lottery sales ('11-'12 = $3.5billion). What % does the private company get on the projected annual $4.5BILLION gross Lottery sales. Do the elderly -- and the rest of PA citizens realize that this is a recipe for disaster?
Robert Applegarth November 16, 2012 at 12:37 AM
I sure do. When I look at the number of winners per game, it becomes very clear that there is a ton of money not being distributed by the state ( Commonwealth). I agree with you, too many PA citizens don't know and probably could care less. As much as I support our troops fighting overseas (it is very hard to remember where), the wrong war is being waged. The PEOPLE must realize that our government is out of control and there is no grass roots organization strong enough to do anything about it. We are the product of our misguided judgement. Where are the true leaders when we need them most?
Mary B November 16, 2012 at 02:14 AM
Amen Robert!
Robert Applegarth November 16, 2012 at 02:29 AM
Any suggestions?
Mary B November 16, 2012 at 03:11 AM
Not off hand, but I like what I hear coming from you.
Richard Weisgrau November 16, 2012 at 03:15 AM
I would suggest you read my blog post and then write to your state representatives, as I did. The silent majority gets what it asks for – Nothing.
Mary B November 16, 2012 at 03:19 AM
Richard, I do just as you suggest regularly.
Robert Applegarth November 16, 2012 at 03:28 AM
Thank you. If we all write, I think calls are just lip-service, and from some of the local people who work for my legislator and their "...who gives a sh$$ attitude...", maybe a letter to their Harrisburg office might be worthwhile. If you get sh$$ from the locals, it appears to be a fete de compli. It is worth a try. Go for it!!!
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Robert Applegarth November 24, 2012 at 02:43 PM
Radtiag, what does your comment have to do with the lottery?
Otis T March 25, 2013 at 07:16 PM
Steven, 150 million upfront huh????? Well the lottery had a 961 million profit last year. PA is considered one of the top lotteries in the nation, so it doesn't make sense to give it away to a company that didn't even have to bid on it!!!! And when is Pa going to abide by what the voters want??? Polls show the voters are against it.......
Norristown Tall Cedars March 25, 2013 at 09:07 PM
Well back in November I asked if anyone remembered how Rendell wanted to privatise the turnpike. And some wanted to know what does this have to do with the lottery? Now we have Corbett wanting to privatise the lottery. Just follow the money.
Norristown Tall Cedars March 25, 2013 at 09:22 PM
Oh, in case anyone forgot, Rendell was going to outsource the turnpike to a Spanish company. And Corbett to outsource the lottery to an English company. Not that I have anything against the Spanish or English, I'd rather we keep things here in America.


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