Hughes Questions Proposal to Privatize Lottery Management

The Gov. Corbett administration is taking bids from private groups interested in managing the Pennsylvania Lottery. The governor’s office announced last April it was looking to turn over part of the Lottery to a private manager.

But not everyone in Harrisburg thinks the same way.

“The Pennsylvania Lottery is an efficiently and effectively run agency that funds critical services that benefit Pennsylvania seniors.  The overall question is, why would the governor propose a privatization plan that potentially threatens to siphon off dollars intended to help seniors and pay them to a private contractor instead?” said Senate Democratic Leader Jay Costa (D-Allegheny).- “The harsh reality is that moving into such a long-term contract as the governor has outlined would be the same as signing the mortgage to senior programs over to a private company for the next generation.”

State Sen. Vincent Hughes admonished the Corbett Administration for moving forward with the potential privatization of state lottery management without involvement from the General Assembly or the public.

“There are so many unanswered questions about this plan and how it impacts senior programs,” Hughes (D-Phila./Montgomery) said.  “The lottery is a well-run, highly-efficient agency, nationally recognized for its success and has been counted on to fund key senior programs for years.  It should not be threatened with privatization.”

Hughes said that it was his understanding that a decision would be made about privatizing the management of the lottery by the end of the year.

“There was no transparency and little chance for lawmakers and the public do a thorough review of this plan to ascertain how privatization impacts seniors and the critical programs that are funded by the lottery,” Hughes said. “The plan to turn over the management of this valuable asset without any real scrutiny by the legislature and without public meetings is a real problem,” Hughes said.

Hughes added that the PMA could have a damaging effect on Pennsylvania’s senior programs and homeowner property tax relief by pitting funding for senior programs against gaming revenues that are used for property tax relief.

The governor’s plan includes the introduction of Internet-based lottery products, which will compete with gaming dollars now generated at gaming facilities.

Hughes’ added that he is also concerned with the duration of the contract, which may bind programs for seniors into a private, unproven approach for a generation.”

“There are ways to expand Pennsylvania’s Lottery, if needed, without resorting to privatization, including adding games, changing current games and adding kiosks to more locations,” Hughes said.  “As evidenced by the robust revenues that the lottery has brought in over the years, the lottery isn’t broken and doesn’t require privateers to fix.”

“This doesn’t require legislation,”Governor Corbett said. “Now if I find that it’s going to cause us to lose money, are we going to do it? No.”

Corbett’s office has laid down its terms for any Lottery privatization deal, including : “”any agreement would span 20 years, with plans to grow profit and possibly implement Keno-like and Internet-based games.”

Last year, the Lottery’s profits amounted to more than $1 billion, according to State House Sound Bites.

The money went toward programs for seniors.

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