Pa. lottery manager effort has clear path

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HARRISBURG -- A tentative agreement between the Corbett administration and a union representing state workers appears to have breathed new life into the governor's effort to hire a private manager for the Pennsylvania Lottery.

A 20-year management agreement with Camelot Global Services, which operates the United Kingdom's lottery, has been stalled since February, when Attorney General Kathleen Kane announced that attorneys conducting a routine review of contracts had concluded the deal would violate state law.

The attorney general's objections to the legality of the contract did not relate to the jobs of workers. But neutralizing the outcry from the labor union, which had filed a lawsuit to stop the deal, could ease the way for legislation to allow the hiring of a private manager.

After recent talks, representatives of Republican Gov. Tom Corbett and leaders of AFSCME Council 13, the union representing about 170 rank-and-file lottery workers, have agreed in concept to a plan under which a private manager would be required to continue staffing the lottery with state-employed, union-represented workers. David Fillman, the union's executive director, and Jay Pagni, the governor's press secretary, confirmed both sides had agreed to the idea, though Mr. Fillman said there is no final agreement.

Camelot had pledged to bring in more than $34 billion in profits over the life of the contract, in part by introducing online ticket sales and keno. Proceeds from the lottery are used to benefit seniors through programs such as property-tax rebates and discounts on prescription drugs.

The management company has agreed in concept to a deal that would require staffing the lottery with union-represented state employees, Mr. Pagni said. A spokeswoman for Camelot declined to comment.

"The governor feels the benefits from the lottery private management agreement outweigh any potential labor-related issues," Mr. Pagni said. "He wants to ensure we can remove those issues from the table in an effort to move things forward."

Administration officials believe the agreement on unionized employees would not cause a material change to Camelot's operating costs or to the profits it would commit to generate.

After numerous extensions, Camelot's bid for the management contract is set to expire Dec. 31. Senate Republicans are working with the governor's office and the House to prepare legislation targeting the legal objections for a potential Senate vote next week, when that chamber convenes for the final time this year, according to Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware.

"A lot of work will need to be done between now and next week for this to have any possibility of getting done," Mr. Arneson said, adding that Republican members have yet to discuss details of any proposal. "It is by no means a done deal."

Mr. Pileggi is advocating for legislation on management of the lottery to contain a provision freezing property taxes for senior citizens, Mr. Arneson said.

The attorney general's office concluded that the management contract represented an unlawful infringement by the executive branch on legislative powers and that state law does not permit the development of monitor-based and other electronic games, such as keno. It also found the contract would allow Camelot too much leeway to claim damages against the state.

Mr. Fillman, the union's executive director, said AFSCME continues to oppose a private management agreement but would ask lawmakers considering a bill to safeguard union jobs.

Senate Minority Leader Jay Costa, D-Forest Hills, said Senate Democrats continue to oppose the management agreement, though he said they are pleased with the discussion of protecting jobs. But he said legislation on the issue requires more vetting than can be done by next week.

Karen Langley: or 717-787-2141. On Twitter @karen_langley.

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