Pennsylvania’s Corbett will drop lottery privatization plan


Pennsylvania Gov. Tom Corbett (R) (Associated Press)

Pennsylvania Gov. Tom Corbett (R) said Monday he won’t pursue a controversial plan to privatize the Keystone State’s lottery program, the latest in a series of legislative setbacks for the embattled first-term governor.

Corbett had been pursuing a deal that would have handed the state lottery over to Camelot Global Services, a British firm, in exchange for $34 billion over 20 years. Corbett had said as early as Thanksgiving 2012 that he would award the contract to Camelot, the only bidder for the project.

But lawmakers, unions and watchdog groups criticized a deal they said would cost the state over the long run. Attorney General Kathleen Kane (D) said last year the plan violated the Commonwealth’s constitution, and a union that represents lottery workers has filed a lawsuit to stop the deal.

The Pennsylvania lottery, which funds programs for the elderly, generated almost $3.7 billion in sales in the last fiscal year, the Philadelphia Inquirer reported, about $1 billion of which went to tax rebates, transit services and centers for senior citizens. The proposed contract would have seen Camelot making annual payments, even if revenue fell short of a set limit, making up the $34 billion figure.

Corbett’s office had made the case that signing the deal would have led to a reliable, predictable revenue stream at a time when the state’s senior population is booming.

But public watchdogs said the revenue coming into the lottery system already doesn’t justify outsourcing profits to a private company.

“With Pennsylvania’s public lottery earning record revenues, there is no reason to let a private company skim dollars off the top that are needed for services for the elderly and threaten jobs across the state. It makes no sense for lotteries, for liquor sales, for toll roads, or for taxpayers,” said Donald Cohen, executive director of In The Public Interest, an anti-privatization group.

Dropping the lottery privatization means Corbett will have achieved just one of his three major legislative agenda items as he kicks off his reelection bid in earnest. Another plan, to privatize the state’s liquor stores, stalled in the Republican-led legislature.

The legislative gridlock, along with several gaffes and his association with the scandal surrounding convicted former Penn State assistant coach Jerry Sandusky, has sent the governor’s approval ratings plummeting. A December Quinnipiac University poll showed just 36 percent of Pennsylvanians approved of the job Corbett was doing, including only 30 percent of moderate voters and 35 percent of self-described independents.

The poll showed Corbett trailing several of his potential Democratic rivals, including Rep. Allyson Schwartz (D), Treasurer Rob McCord, businesswoman Katie McGinty (D) and former state Auditor Jack Wagner (D).

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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