HARRISBURG - An introduction of keno games under a privately managed Pennsylvania Lottery would be gradual, with some 500 restaurants and taverns that have Lottery retail licenses getting keno first, Corbett administration officials told the Senate Finance Committee on Monday. State officials have authority under state lottery and procurement laws to add terminal-based games like keno and online games without obtaining legislative approval, said Revenue Secretary Dan Meuser. A bright line exists under state law between lottery games and gaming, he said.
The first keno games could appear this year, while plans call for the sale of Lottery tickets online by 2015, Mr. Meuser said. A pilot keno program could involve taverns and restaurants with retail licenses, said Deputy Budget Secretary Pete Tartline.
The proposal by Camelot Global Services PA LLC to privatize management of the Lottery as a way to generate more money for programs that benefit senior citizens is based in part on adding keno and online games. Keno allows players to pick numbers to match numbers selected by a computer. The Corbett administration said Friday it has accepted the Lottery management bid by Camelot, operator of the British national lottery. This is a key step for Camelot to obtain a state contract to run the Lottery. A contract could be awarded soon, administration officials said, but then it would face a multilayer legal review involving the Revenue Department and governor's office. As part of that review, incoming Attorney General Kathleen Kane, who takes office today, would examine the contract for legality.
Camelot has pledged to produce $34 million in Lottery profits during the next 20 years. Camelot's bid allows the state to draw a shortfall payment from $150 million cash collateral put up by the firm if annual profit commitments fall short. Sen. John Blake, D-22, Archbald, the finance panel's minority chairman, said doubts still exist among his caucus whether Gov. Tom Corbett can move on his own to privatize the Lottery or expand legalized gambling with keno and online games. He predicted those issues would eventually be settled in court.
"I join with my colleagues in the Senate Democratic caucus and AFSCME in demanding a proper legal accounting in court as to the constitutional authority and the unilateral discretion being exercised by the Corbett administration in this matter," Mr. Blake said.
Camelot officials testified they want to expand the pool of Lottery players, and adding terminal-based games is part of that strategy.
"We are going to get more people to play a little rather than focus on a group of people playing a lot," Mr. Meuser said. State officials will make the major decisions involving such matters as keno payouts, he said.
The secretary said no consideration is being given to adding video poker machines, since that involves betting money against the machine and Mr. Corbett is opposed to it.
David Fillman, executive director of the American Federation of State County Municipal Employees Council 13, testified that expansion of keno and online games could be done in-house by Lottery employees at a lower cost.
Sen. Pat Browne, R-16, Allentown, called the privatization move a "sincere effort" to improve a program that people rely upon.
Despite record sales, Lottery revenues have been shifted in recent years to pay for nursing home costs under the state Medicaid program, resulting in cuts to services like home-delivered meals, senior center hours and home care, said Ray Landis, advocacy director for AARP Pennsylvania. "AARP believes Medicaid nursing home expenses should return to the General Fund so the Lottery Fund can fulfill its intended purpose - providing essential assistance to help older adults remain at home," he said.
Incoming state Auditor General Eugene DePasquale, who also takes office today, said he will make sure funding for senior programs gets priority under any privatization deal.
Contact the writer: rswift@timesshamrock.com