Sen. Costa: Lottery Protections Needed
Says Senior Citizen Programs Shouldn’t be Pawns of Privatization
In an effort to prevent the potential negative impacts of Gov. Corbett’s plan to privatize the management of the state lottery, legislation was unveiled earlier this month by Sen. Jay Costa that would protect the Lottery Fund and its funding streams.
“The legislation creates safeguards and protections for the Lottery Fund and will ensure that programs now paid for by the lottery won’t become victim to for-profit motives of private management companies,” Costa said.
Costa said that his legislation, if enacted, does not interfere with the private management option. The plan seeks to create guarantees so that the operations and programs of the lottery do not ever become victimized by private for-profit motives, Costa noted.
The measure provides openness, accountability and scrutiny to the process and establishes a set of parameters for any private management contract with the lottery. Costa said that the following provisions must be written into any contract with a private firm:
- A contract cannot be longer than five years;
- Final control is exercised by the Lottery over all significant business decisions;
- Decisions by the private manager may be countermanded;
- Right to demand information concerning any aspect of the lottery may be exercised;
- Advanced notice is provided of any operating decision impacting public interest;
- Fee and bonus structure for private management personnel is detailed;
- The principal office of the manager must be located in Pennsylvania;
 In addition, the contract must be let by open and public bidding. The selection is through a competitive request for qualifications process based on stringent bidding protections.
Costa’s plan relies heavily on accountability and there are public hearings built into the bid award process. In addition, the governor must issue a statement detailing why a specific bidder was selected.
Costa said that he believes heightened protection is warranted for the Lottery Fund because it has proven to be an invaluable aid for seniors and the disabled. The fund pays for reduced prescriptions, property tax and rent rebates, shared-ride services and other programs used by seniors.
Costa, the Senate Democratic Leader, said that while he does not support privatization because the Pennsylvania Lottery is “doing exceptionally well and should not be run by a private manager.
“If the governor wants to go in the direction of privatizing the management of the lottery, there must be parameters and protections afforded seniors that the lottery will go awry and that life-saving programs will be guaranteed.”
The governor announced the plan to explore privatizing lottery management earlier this year. In his public presentation his office produced charts and graphs detailing the advantages of privatization.
Costa said that while it is admirable that the governor is trying to augment current lottery funds and exploring way to maximize revenues he believes that the current approach can be adjusted to get better results, without privatization.
In prepared remarks, Costa said that we can “expand the current lottery operations and utilize a new marketing plan to reach new revenue targets without jeopardizing programs.”
Costa said his legislation is based on an Illinois statute. Illinois recently moved to privatize the management of their state lottery.
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