Corbett’s lottery plan a misdeal
If Gov. Tom Corbett is re-elected in November, his failed experience in trying to privatize the Pennsylvania Lottery hopefully will help him be a better governor going forward.
Corbett made all the wrong moves in his lottery-privatization effort. First, he kept lawmakers of both parties out of the loop, embracing the belief that it was his administration’s prerogative to pursue the deal based on its own objectives, goals and expertise. Then there was the legitimate question of whether the administration had been aggressive enough in seeking offers other than the one submitted by Camelot Global Services, which operates the British national lottery.
The administration never was upfront with enough information to prove that it had done so, although there was another offer, albeit short-lived, early on.
Corbett remained steadfast in pushing ahead on behalf of the deal, with little concern about Pennsylvania residents’ right to know. There should have been a series of public hearings regarding the plan before the administration approved it, but the governor ignored that consideration of the taxpayers’ best interests.
Most importantly, the administration failed to ascertain the legality of the deal before moving to commit the state to an agreement that might have backfired, at the expense of senior citizen programs that the lottery benefits.
According to the administration, the deal with Camelot promised the state $34 billion in profits over 20 years – a nice-sounding number. But there was no way to guarantee that the lottery, currently run by state employees, could not achieve a similar or greater profit figure if allowed to implement strategies like those Camelot sought to introduce – including better advertising and the addition of keno and online lottery access.
That never was adequately studied as Corbett sought to strong-arm the Camelot proposal into effect, without regard to the other elected officials who the voters “hired” to protect the commonwealth’s best interests.
Meanwhile, Corbett never told state taxpayers that they would be on the hook for millions of dollars of consultant fees tied to the Camelot deal. An article in the Dec. 31 Mirror reported that lottery-deal consultants already have been paid $3.4 million, with more invoices pending. Taxpayers should demand to see the final cost.
State Attorney General Kathleen Kane protected Pennsylvania’s interests in challenging the deal. She claimed that it violated both the state constitution and state laws. Even if she had been proven wrong, her decision to question the deal would have benefited the state, by putting the Camelot plan under a microscope before there was no backing-out of it.
Corbett’s errors and bad judgment on this measure caused too many lawmakers to be leery about passing legislation to resolve Kane’s objections – the right decision from the General Assembly’s perspective.
The Pennsylvania Lottery, one of the nation’s largest, had $3.7 billion in sales in its last fiscal year and provided more than $1 billion in proceeds to programs for the elderly. Its future should not be gambled with an agreement that is not allowed to have adequate review before implementation.
Corbett should heed the lessons emanating from his failed lottery endeavor if he becomes a two-term governor.