Tuesday, December 04, 2012

Phyllis on the lottery: If it ain't broke don't fix it.

Riffing on my earlier post State Rep Phyllis Mundy and 17 other PA House Democrats sent a letter to Gov. Tom Cabot Corbett to forget about his plan to privatize the Pennsylvania Lottery. NCFE defends this form of voluntary taxation that has been successful.  In the end, why screw this up?

Mundy asks Gov. Corbett to drop lottery privatization plan

HARRISBURG, Dec. 3State Rep. Phyllis Mundy joined 17 other House Democrats in signing a letter that urges Gov. Tom Corbett to drop his plans to privatize the Pennsylvania Lottery.


"The Pennsylvania Lottery is a proven, well-run program that last fiscal year made more than $1 billion for programs to help our seniors, such as the Property Tax Rent/Rebate Program and Pennsylvania's low-cost prescription drug programs for older adults, PACE and PACENET," Mundy said. "The system isn't broken, and we don't need to take unnecessary risks with it."


The letter notes that the Pennsylvania Lottery is one of the most successful and well managed state lotteries in the nation, with administrative costs of just over 2 percent. Just one company, United Kingdom-based Camelot Group, has submitted an offer to run the Pennsylvania Lottery. Camelot Group has conceded the Pennsylvania Lottery is presently well-run.


"So our question for you is, 'Why are you trying so hard to privatize a successful government program and, in the process, hand over millions in administrative fees to a third party manager?'" reads the letter, which was delivered to Corbett's office today.


Mundy pointed out that Camelot would get a cut of the lottery profits and have its operating expenses paid, including salaries for its executives, by the commonwealth.


Just two states – Illinois and Indiana – have privately run lotteries. Illinois awarded a contract to Northstar Lottery Group, a partnership between GTECH and Scientific Games. Northstar has fallen short of the $825 million it promised Illinois officials, and the company has taken the state to court to try to change terms of its contract.


Mundy said the Illinois' problems show why Corbett should not rush to privatize the lottery here.


"There's too much at stake," Mundy said. "The lottery generates important revenue for our older Pennsylvanians, and it's too risky to outsource it to a foreign company."


Mundy added the lottery-funded programs are particularly important in Luzerne County, where people 65 and older make up nearly 18 percent of the population.


Camelot Global Services’ bid to manage the state Lottery will expire on Dec. 31. This contract would lock the commonwealth into an agreement for 20 years, long after Gov. Corbett is gone. 

  A copy of the letter is available by clicking here.

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