Pennsylvania lottery deal being revised to address attorney general's concerns

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Gov. Tom Corbett said today his administration will revise the agreement for the private management of the Pennsylvania Lottery to make clear the plan is legal instead of appealing Attorney General Kathleen Kane's denial of the pact.

"This is a services contract," the governor said shortly before marching in the Pittsburgh St. Patrick's Day Parade. "We've tightened it up and are going to send it back to her.

"I certainly hope it does [answer her concerns]--we're not doing this for an exercise--but if it doesn't we'll take a look at filing a challenge with the court."

Profits from the lottery fund programs for seniors, and Gov. Corbett has touted the proposed 20-year management agreement with Camelot Global Services as a way to ensure steady and increased funding for a growing population of older Pennsylvanians. Camelot, which manages the United Kingdom's lottery, had committed to generating $34 billion in lottery profits over 20 years, in part by introducing online ticket sales and keno.

But that plan was sidelined in February, when Ms. Kane said her office had determined the contract violated state law. Mr. Corbett, a former attorney general, said he strongly disagreed, and for weeks has said he was determining how to respond.

With an appeal to the courts due today, the governor's office announced late Friday it would revise the contract "in order to provide clarification to the attorney general."

The attorney general had raised three objections to the contract: that it infringes on the Legislature's power to make policy; that state lottery law does not allow monitor-based games, like keno; and that it included too broad a provision for Camelot to make claims against the state.

The administration does not plan to remove keno or other components of the contract, but rather to demonstrate that the agreement is lawful.

"The changes that we propose making are just to clarify the concepts within the contract to illustrate that existing law, regulations and contracts do provide for such authority," said Elizabeth Brassell, spokeswoman for the state Department of Revenue. "We're not looking to change the terms and conditions of the contract."

The governor's office said it anticipates submitting a revised contract to the attorney general within the next several months.

Dennis Fisher, a spokesman for the attorney general, said: "If and when the Department of Revenue resubmits a revised private management agreement, the Office of Attorney General will fulfill its obligations under the Commonwealth Attorneys Act and review the agreement for form and legality."

The bid by Camelot, which had been set to expire Monday, has been extended through June 30, the administration said. David La Torre, a spokesman for Camelot, confirmed the company is in discussions with the state on potential revisions, but said Camelot had no other comment.

The state workers employed by the lottery have fought the administration's plan, and David Fillman, executive director of AFSCME Council 13, said Friday that lottery management should be left in-house.

"We think this is just a waste of everybody's not only time but money," he said. "We could be just concentrating on making the lottery a better lottery than it is now, although it's one of the best in the nation."

Democrats in the Legislature have opposed the lottery plan, and Bill Patton, a spokesman for House Democrats, said Friday that the agreement remains unlawful.

"Yet another extension of this contract does not change the basic problem," he said. "It represents an illegal expansion of gambling without legislative authority."

Steve Miskin, a spokesman for House Republicans, said management of the lottery is up to the governor.

"The goal was to have sustainable funding for continuously growing programs to help seniors," he said. "A laudable goal, and one that we would think everyone would be in agreement with."

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Staff writer Michael A. Fuoco contributed. Karen Langley: or 1-717-787-2141.


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