AFSCME District Council 13, which represents most of the 230 employees of the Pennsylvania State Lottery, has unveiled its alternative to Gov. Tom Corbett’s proposed privatization of lottery operations: Leave it alone.
By law, the union was permitted to offer an alternative to the proposal for a long-term contract with the British firm, Camelot Global Services, which promises $34 billion in lottery profits over the next 20 years, backed up by cash reserves and a letter of credit.
The potential agreement requires the company to provide $150 million in cash collateral. If Camelot doesn’t deliver, the state will be able to draw from that fund.
But the union’s Michael Fedor says there’s a federally mandated cap on withdrawals that would hamper the commonwealth’s access to the cash.
“If they miss their number by 10 percent, they cannot make up the full 10 percent next year from withdrawing from that fund because of the cap,” he said. “So there’s this gap between the asserted profit guarantee and then the actual amount of money the commonwealth can withdraw — so who pays the difference? That’s the question we have yet to have answered by the commonwealth.”
The union proposal, titled “A Win-Win for Pennsylvania,” also argues that lottery revenues are strong under the current management, and questions whether Camelot can live up to its promises.
Meanwhile, the union’s Kristie Wolf-Maloney says they’d do even better than $34 billion over 20 years.
“We’ve expanded Lottery games in the past. And, by we, I mean our members and the Lottery folk. There’s no reason we can’t do that in the future,” Wolf-Maloney said. “If those expansions are found to be legal, there’s no reason that our folks, who have the knowledge and have the work experience, can’t expand those games going forward.”
The document says the union is not opposed to new games, such as keno to expand lottery earnings, though union officials believe legislative approval would be required.
Camelot was the only firm to respond to a bid invitation by the Corbett administration. Its offer technically expires Thursday, though it’s expected the company will extend it into next week.
The competing claims about privatization will be aired in a state senate hearing on Monday.