Pennsylvania Lottery publishes key terms for bidders

Governor Tom Corbett’s administration has published key terms for a potential Private Management Agreement (PMA) for the Pennsylvania Lottery following interaction with bidders to identify ideas for growing Lottery profits that may include an online offering in the future.

While the ownership and control of the Lottery will remain with the State of Pennsylvania, the management of the lottery is under review with the successful bidder expected to deliver annual profit commitments for the next twenty years that would be utilised by the State to solely fund programmes benefiting the elderly.

The successful bidder, or private manager, would require $150 million up-front cash collateral to operate under a twenty-year agreement that may be extended for a further ten based on performance.

Other key terms include:

–     Private manager compensation;
–     Personnel plans and employee transition strategy; and
–     Implementation of industry best practices for responsible sales growth including monitor-based games and Internet products.

The administration is currently evaluating bidders’ business plans towards making a final decision on whether to enter into a PMA.

“First we had to understand and decide upon exactly what we’d require and expect from a private manager, and now that we have that basis, we can start to evaluate how qualified bidders react to the proposal and plan to improve Lottery operations,” said Revenue Secretary Dan Meuser.

“This is a careful, iterative process where each decision impacts the next step, and there are a number of ‘next steps’ to consider in coming weeks, including contractually mandated dialogue with the union representing Lottery employees, before we can determine if a PMA is in the best interest of the Lottery and the seniors who benefit from Lottery-funded programs and services.”

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