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Privatizing the Pa. Lottery would mean less money for senior citizen programs, union says | PennLive.com

Jan Murphy | jmurphy@pennlive.comBy Jan Murphy | jmurphy@pennlive.com 
on January 08, 2013 at 1:28 PM, updated January 08, 2013 at 3:17 PM

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The union representing lottery workers claims it could make $799 millions more in profits to fund programs for older Pennsylvanians if the state kept its management in-house rather than outsourcing it.

In its counter-proposal, the American Federation of State, County and Municipal Employees Council 13 also asserts the $200 million guarantee in United Kingdom-based Camelot Global Services PA LLC’s bid to manage the lottery is “a falsehood.”

In its 20-year bid, Camelot is posting $200 million in a security fund made up of cash collateral and letter of credit that the state could tap if the company fails to hit its annual profit commitments.

The union says the proposed agreement with Camelot “stipulates that at no time may the cash withdrawal (from the security fund) … be greater than 5 percent of that year’s ‘profits.’”

In other words, it says if Camelot came in $200 million short of its profit commitments, the state couldn’t withdrawal the entire amount to make up the difference.

The proposal said Gov. Tom Corbett’s administration have “claimed privatization would only proceed if it meant substantially ‘more money for Pennsylvania seniors.’ AFSCME’s research demonstrates seniors would receive less money under privatization than continued public operation and management.”

Elizabeth Brassell, a spokeswoman for the state Department of Revenue, which oversees the lottery, said the administration just received the union’s counter-proposal “so we’ll need to give it the careful review and consideration it deserves before being in a position to comment.”

This post has been updated.

Privatizing the Pa. Lottery would mean less money for senior citizen programs, union says | PennLive.com.

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