Governor touts Pa. Lottery deal; AG review up next

HERSHEY, Pa. (AP) -- The state budget plan Gov. Tom Corbett will present to Pennsylvania lawmakers next month will call for an additional $50 million to improve programs for senior citizens, the governor said Thursday.

Corbett said the money will come from an increase in Pennsylvania Lottery revenue that he expects to result from a British company's takeover of lottery management — a move the Republican governor said is designed to help state programs and services keep up with a growing elderly population.

"The lottery needs to expand. It needs to grow. It needs to appeal to more people. And it needs to use the efficiencies and the enterprise unique to the private sector," Corbett said at a news conference at the Mohler senior center in Hershey.

More than $40 million of the additional money Corbett plans to seek in his 2013-14 budget plan would be used to provide in-home and other services to an additional 6,900 Pennsylvanians over 60. About $5 million is earmarked for area agencies on aging and $2 million for the modernization of senior centers.

M. Crystal Lowe, director of the Pennsylvania Association of Area Agencies on Aging, said she welcomes the prospect of relief from financial pressures that have forced 10 percent of the state's senior centers to close in recent years.

"We've been trying to do more and more with less and less but, you know, the need has far outstripped the resources that we have," she said.

Corbett said Pennsylvania's 2.7 million senior citizens make up the fourth-largest senior population among the states. By 2030, one-quarter of the state's population will be over 60, he said.

"That's nearly 1 million more seniors who will be eligible for the services that the lottery funds provide," he said.

Corbett's administration has finalized a 20-year contract with British lottery operator Camelot Global Services to manage the state-owned lottery. The attorney general's office received the paperwork Wednesday and has 30 days to review its form and legality.

Still, Camelot now has the right to begin its work, including observing lottery practices, administration officials say. The move makes Pennsylvania just the third state — behind Illinois and Indiana — to privatize its lottery management.

Other legal challenges are pending.

The union that represents lottery employees has sued to block the contract, in addition to filing a grievance and an unfair labor practice charge against the Corbett administration. Also, state Treasurer Rob McCord has threatened not to pay Camelot until he is satisfied that its plans to expand gambling are legal.

Camelot is obligated to generate profits of at least $34.6 billion over the life of the contract — $3 billion to $4.5 billion more than the lottery could be expected to achieve under state management, the Corbett administration said. The company hopes to achieve that benchmark by expanding the scope of lottery games and attracting more players, particularly higher-income earners.

The lottery employees' union disputes that contention.

Camelot's 20-year contract can be extended to 30 years if the company reaches certain performance benchmarks. It will charge a management fee worth hundreds of millions of dollars over the life of the deal and receive cash incentives for exceeding its annual profit commitments. Those incentives are capped at 5 percent of profits.