Keep the lottery
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Before Gov. Tom Corbett gives away the Pennsylvania Lottery to a British firm, let's look at facts.
The FY2012 fiscal statement reported $3.48 billion in ticket sales with $2.12 billion (61 percent of ticket sales) paid out in prizes, $240 million (7 percent) paid in commissions to vendors and $1.06 billion in profits (30 percent of ticket sales) paid out to benefit Pennsylvanians. Expenses -- including advertising costs -- were $73 million or 2.1 percent of total ticket sales. Of the 42 state-run lotteries, Pennsylvania's ranks sixth in efficiency and is currently ranked sixth in sales. We are, not coincidently, the sixth most-populous state.
According to Wikipedia, Camelot Global Services' performance for the UK National Lottery shows the firm paid out 50 percent in prizes, 5 percent in vendor commissions with only 28 percent going to good causes. Camelot's expenses were 5 percent of ticket sales, double that of the Pennsylvania Lottery.
Camelot has "pledged" $34 billion over a "20- to 30-year" period; no one has mentioned liquidated damages so we have to assume the pledge is simply that -- talk. Given Camelot's performance in the United Kingdom, we have to assume that much less prize money will be given out, less money paid to vendors and to Pennsylvanians. In comparison, using 2012 numbers, the Pennsylvania Lottery would generate $32 billion over 30 years.
Currently 99.9 percent of all ticket revenues remain in the hands of Pennsylvanians. There is no reason to believe that a foreign company that has double the operating expenses will outperform that.
First Published January 18, 2013 12:00 am