More hassles with privatisation of Pennsylvania state lottery

Pennsylvania Governor Tom Corbett’s troubles just keep growing over his plans to privatise the $3.5 billion state lottery and hand over its operation to the British company Camelot Global Services.

Earlier this year he was pulled up short by state Attorney General Kathleen Kane and Treasurer Rob McCord over constitutional and procedural questions in the privatisation contract award .

Now the state Gaming Control Board has weighed in, pointing to potential legal problems in Corbett’s stalled plan to hire the British company to manage the Pennsylvania Lottery.

The chief counsel of the Board has observed that the proposed contract documents are ambiguous and do not say clearly what kinds of new gambling Camelot Global Services would be allowed to operate.

Consequently, it is impossible to say whether it infringes on the gaming board’s authority under state casino gambling laws or creates illegal forms of gambling, the board’s top lawyer, Douglas Sherman, wrote.

“Despite the references to Keno, Internet games and monitor-based gaming, none of the mentioned documents provide a level of detail or description of the games contemplated, or the types of operations of the monitors contemplated for use in Keno or any other monitor-based game,” Sherman points out in a response to a request for an analysis of the contract requested by members of the House and Senate Appropriations Committees following the Kane and McCord opinions.

Corbett has not sought lawmakers’ approval in his attempt to hire Camelot on a 20- to 30-year contract, saying that he believes Camelot can produce higher and more stable lottery profits for the state programs that benefit the elderly.

Lawmakers who oppose his unilateral action have criticised Corbett for simply diverting hundreds of millions of dollars from programs for the elderly to a foreign company.

In December, Treasurer McCord told Corbett’s administration that he may not pay the company until he was satisfied that Camelot’s vague plans to expand lottery gambling were clearly legal under state law.

Then in February, Attorney General Kane rejected the contract, saying parts of it, including its expansion of gambling, contravene the state constitution or are not authorised by state law.

Governor Corbett said last month that his administration plans to resubmit the proposed contract to Kane after revising it, although it has not said what changes it would make.

On Monday, a spokeswoman for Corbett’s Department of Revenue, which oversees the state lottery, said the administration expects that its changes to the contract will provide clarity for the gaming board.

Administration officials have assured lawmakers that they would change provisions in the contract to address concerns by Republican senators to make it clear that Camelot cannot drive the Pennsylvania Lottery into competition with land casinos through online gambling.

The contract with Camelot remains the subject of a court challenge by several Democratic lawmakers and the union that represents lottery employees.