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AG rejects Pa. lottery contract - abc27 WHTM

AG rejects Pa. lottery contract

HARRISBURG, Pa. (WHTM) -

The state attorney general's office has rejected Gov. Tom Corbett's contract to privatize the Pennsylvania Lottery.

In a news conference Thursday, Attorney General Kathleen Kane said the $3.5 billion contract with Camelot Global Services is not allowed by law.

Kane said her office determined the Corbett administration exceeded its authority under the Pennsylvania Constitution by not involving the Legislature in changes to the management and operation of the Lottery.

Camelot responded in an official statement Thursday afternoon saying they are disappointed in  Kane's action and that the contract would have produced "unprecedented profits for senior programs." 

Camelot also noted that they plan to keep lottery headquarters in the state, pay state taxes and keep all lottery jobs within Pennsylvania.

"We have backed our investment in Pennsylvania with $200 million – transferring all risk from state taxpayers ... We have also publicly stated we would not oppose union organization by our employees," Camelot wrote.

In her statement Thursday, Kane added that a provision in the Camelot deal, a plan that calls for Keno in bars and restaurants and online games in the future, would violate both the State Lottery Act and the Gaming Act.

Kane said another part of the Camelot contract is unconstitutional because it would allow the U.K. based company to be compensated for indirect expenses.

It was up to the attorney general's office to look over the form and legality of the 20- to 30-year contract.

Corbett can challenge the decision in court. The governor said he's "deeply disappointed" by the disapproval and does not agree with the attorney general's analysis of the contract.

In a statement, Corbett said: "We have a growing population where one in four Pennsylvanians will be over the age of 65 by 2017. My goal is to ensure that funding for senior programs keeps pace with that growth."

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