Over the next 20 years, Pennsylvania’s senior population is projected to grow tremendously. The population percentage of those between 70 to 79 years old is expected to expand by 34%, and those over 95 years old is expected to grow by 139%. Governor Fail is using these demographic projections to privatize one of the best lottery systems in the country to a foreign multi-national gaming firm – Camelot Gaming Services. The governor’s quest to privatize the system began last spring when there were three potential bidders in the process, but since then two of the initial bidders dropped their offers, leaving the British multi-national the only firm remaining The thought of privatizing the state system has remained dormant until last week because the Attorney General’s Office, the State Auditor’s Office and the General Assembly are all in lame duck sessions, which allows for the possibility that the system can be privatized without any public hearing or legislative action.
The potential terms of the privatization contract are absurd and offers the possibility that Pennsylvania senior citizen programs will suffer to cover administrative costs and the back pockets of those at Camelot. Coming off of one of the best years in the Pennsylvania’s Lottery System’s history, the system generated $3.2 billion in sales and close to $1 billion going towards senior programs which was an increase of 8.5%. The contract Camelot would receive would be a 20 year deal with an option for 10 more years and a promise of $34 billion in revenues and doubling the lottery’s profit by 2033. To swoon the governor’s office, the company is offering a $150 million cash collateral and $50 million line of credit. In this deal, Camelot won’t be the only firm rolling in the green backs. Greenhill and Co, the bank who hired Ed Rendell as a lobbyist after he left public office, is set to make another $3 million in brokering the deal.
On the surface, the concerns of privatizing the lottery system are obvious. Pennsylvania senior citizens, one of the most vulnerable age demographics, may see senior programs lose money if the Camelot doesn’t live up to it’s expectation. The length of the contract is another hurdle that the Pennsylvania citizens will be forced to swallow if Camelot does not meet expectations. According to the potential terms of the agreement, the privatization scheme will only require 70 full time employees, but the current system has 232 employees – 169 of which belong to AFSCME. But the way the Camelot would expand the system to cover projected revenues is one of the most important issues that not many are talking about.
Camelot would like to expand the system by adding online gaming and Keno games in bars and other establishments across the state, but this expansion may affect Commonwealth taxpayers over the potential legal fight with the casinos across the Commonwealth. When talking to Representative Anthony Deluca – a democrat from Allegheny County who is currently drafting legislation that would force the governor to bring any public-private partnership contracts to the General Assembly – he explained that the state’s potential expansion could open a can of worms in the state’s court system between the casino’s and the Commonwealth. In the 2004 gaming law that legalized slot gambling in Pennsylvania, casino developers must pay a $50 million licensing fee with the conditions that the state will not expand their gaming operations, which is in clear conflict with Camelot’s aspirations.
The lines have been drawn and during this lame duck session, the Corbett Administration will try as hard as they can to privatize this system to serve their corporate interests. When talking to Representative Deluca, he jokingly said that “the Pennsylvania Lottery System isn’t allowed to make political donations,” may actually be truthful since our governor has been bending over backwards to please his corporate lords. By creating panic and a crisis that doesn’t exist, the governor – Governor Fail – and his cronies is willing to put some of the most vulnerable at risk by selling one of the most successful programs in the country so that a corporation that isn’t even based in the United States can walk away with more money – even if they do not live up to their projections.
Sean Kitchen is an Assistant Editor and Social Media Organizer for Raging Chicken Press. He is student at Kutztown University and intern with APSCUF.