By Dick Miller
WE CONNECT DOTS: PA Gov. Tom Corbett’s intended privatization of the lottery business points to significant differences in the two political parties. At the same time this move also shows the weak stomachs of lawmakers on both sides.
Corbett recently contracted out the management of the entire lottery to a foreign company while legislators were on holiday. Apparently he made no effort to inform lawmakers of his intentions nor did he consult with legislative leadership of his own Republican party.
Camelot, a British company that runs the English lottery, was the only bidder after two other intended applicants withdrew.
Camelot Global Services LLC promises to form a PA corporation to administer our lottery. This is supposed to make citizens comfortable, but one advantage for Camelot is that it limits its liabilities (the downside) to whatever resources it chooses to place in the Pennsylvania business.
Reasonable speculation is that the hard right of the Republican Party would support erasing 160 union jobs, but not if the only means was to expand gambling.
(Of course the same argument could be raised for Corbett’s intention to privatize liquor stores.)
Increased gambling and drinking opportunities, of course, cannot compare with making abortions more available or allowing same-sex marriages. This is what makes the Republican Party more dangerous than its registration numbers indicate. The GOP’s fringe element is more likely to vote on one or two issues, ignoring all other partisan differences.
The contract requires Camelot to expand the lottery through Keno “and other online games.” Keno is a game of chance based on the drawing of numbers that must correspond with selected numbers on cards, like bingo. In PA online Keno jackpots will be awarded several times per day.
These are the unanswered questions.
The state intends to increase lottery income by installing keno in bars and restaurants and permitting online sales. This has to dilute the value of casino licenses which were sold by the state beginning in 2004 for $50 million each. Will the casinos litigate? Will the takeaway volume cut heavily into casino profits?
For the last two years lottery district managers have been telling outlet owners the state was introducing Keno. The talk was rampant even while Ed Rendell was Governor. The ex-Gov. admits he has an “association” with Camelot, but has not used his influence to help this contract. Really?
The state hopes to double lottery outlets to increase sales and profit. The state does not say it will increase outlet income beyond five percent of gross sales. This was more enticing when the lottery opened 42 years ago and until probably a decade ago. The state requires lottery outlets to open separate bank accounts and keep all lottery money segregated. Because banks now extort large fees for business accounts, will even more outlets not gross enough to cover their expenses?
Will the courts agree that Corbett had the right to negotiate and sign such a contract without legislative oversight? For that matter will new Attorney General Kathleen Kane approve the contract? Will newly re-elected state Treasurer Rob McCord make payments to Camelot only if ordered by a Court?
Last summer Corbett and the legislature wasted no time in outlawing internet cafes, claiming influence of organized crime, a falsehood. Some thought this was to protect the casino monopoly. Could the real reason be to protect the state monopoly?
Not the least, will the Bible Thumpers continue to ignore the spread of gambling?
One Corbett assertion is not contested. The lottery exists to benefit senior citizens and the numbers of old people are increasing.
A majority of legislators in both Parties act as if voting to increase taxes is akin to stealing or being found with a mistress. Therefore a scheme like adding keno to the lottery is at least secretively palatable.
