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Corbett Weighs Lottery Deal Appeal

Gov. Tom Corbett’s decision on how to proceed with the proposed privatization of the Pennsylvania Lottery could come by week’s end, the state’s revenue director said.

Last week, Attorney General Kathleen Kane rejected a 20-year, $35 billion professional management agreement with Britain’s Camelot Global Services as unconstitutional. Some provisions needed legislative approval, she said, while others contradicted gaming laws. Camelot, which runs Britain’s national lottery, has granted a six-day extension on the agreement. That extension will expire Friday.

“Camelot’s hopeful that a plan can be pieced together in the shorter term, perhaps the longer term, but certainly they’re not going to invest their resources without a light at the end of the tunnel. So a lot has to be decided over the next few days and the risk vs. benefit needs to be carefully be considered,” revenue Director Dan Meuser said late Tuesday.

Meanwhile, Pennsylvania returned a $50 million security deposit to Camelot, according to Meuser.

“Due to the fact that no execution is in the near term, the $50 was actually returned and a promissory note will be secured if we continue to pursue a PMA,” he told reporters after testifying before the House appropriations committee in Harrisburg.

Corbett could appeal Kane’s decision in the Commonwealth Court of Pennsylvania. Corbett is a Republican, Kane a Democrat.

The governor could tweak the contract and resubmit it, although Meuser warned that downsizing or otherwise reworking it could trigger separate problems.

“That’s a big question. Maybe ... however, you do run into bidding procedures, changing the bid process, changing the request for proposals and so forth. It could certainly open you up to new protests, so the whole bidding process if something like that were done would likely have to be completely redone.”

Camelot, which has otherwise withheld comment, expressed its disappointment with the ruling by Kane, who took office Jan. 15.

“We guarantee our proposal will produce unprecedented profits for senior programs and we have backed our investment in Pennsylvania with $200 million – transferring all risk from state taxpayers,” the company said. “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 organization by our employees.”

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