Penn. Attorney General claims Camelot lottery deal invalid
20-year privatisation contract under threat after Kathleen Kane says it doesn't meet the requirements of the state constitution and lottery law.
Pennsylvania Attorney General Kathleen Kane has claimed that Camelot’s successful bid to manage the state’s lottery contract is illegal, arguing that Governor Tom Corbett overstepped his authority by approving the privatisation contract.
During a news conference yesterday Kane detailed the findings of her review into the privatisation process, which would see Camelot Global Services manage the lottery for the next 20 years and promised to generate US$34.6bn over the course of the contract.
She said the deal, which was publically back by Corbett, failed to meet the requirements of the state constitution as the privatisation process did not gain legislative approval, as well as undermining the authority of the Pennsylvania Gaming Control Board.
“It is our duty to defend and protect the constitution of the commonwealth and that is what our office has done by declining this contract,” Kane said in a statement.
Kane also criticised Corbett for adding pressure on her to sign the contract by claiming the privatisation will generate an additional $50m in the state’s upcoming budget to put towards supporting older residents.
Corbett reacted by saying he was “deeply disappointed” in Kane’s ruling and that he would be reviewing legal options going forward. “I don’t agree with the attorney general’s analysis and decision”¦ My job is to protect Pennsylvania’s seniors, and we will continue to do that.”
UK National Lottery operator Camelot, for whom the contract would represent a significant coup in its global expansion, said in a statement: “We guarantee our proposal will produce unprecedented profits for senior programs and we have backed our investment in Pennsylvania with $200m “ transferring all risk from state taxpayers.
“Camelot has indicated it would headquarter in Pennsylvania, pay all taxes required of any commonwealth business, and keep all lottery jobs in the state. We have also publicly stated we would not oppose union organisation by our employees. We have no further comment at this time.”
Kane’s decision was widely backed by state Democrats, with Senate Leader Jay Costa of Allegheny County saying in a statement: “Pennsylvania residents can rest easy now that the attorney general took this action and put a stop to the expansion of gaming without proper authorisation.
“The entire plan was flawed. It is clear that there are ways for current employees of the lottery to be given the latitude to implement changes that will produce better results and even more money being generated.”
Should the deal go through, Pennsylvania would become the third American state to outsource its lottery operations after Indiana and Illinois.
Online gambling has not yet been legalised in the Keystone State, meaning that the lottery contract would be for offline ticket sales initially, but in November, Corbett confirmed that a proposal to offer online gambling through the state lottery should soon be considered by the state and the move to privatise means that it is very likely the state will pass internet lottery ticket sales legislation soon.