If Lottery plan has merit, prove it rather than fight Kane
Attorney General Kathleen Kane's rejection of Gov. Tom Corbett's deal to privatize the state lottery doesn't resolve the question of whether private or public lottery management is superior. It does, however, answer an even more fundamental question: whether the governor has the authority to do so without legislative approval and the public input inherent in such legislative decisions.
State law requires the attorney general's legal review of contracts. Since Saturday was the deadline imposed by the would-be lottery contractor, Camelot Global Services PA LLC, Kane could have let the deadline pass and allow the contract to die on the vine.
Instead, she forthrightly rejected the deal, finding that it violates the state constitution and is not authorized by state law.
Camelot was the sole bidder to take over the lottery. Beyond Kane's findings, there were practical issues that called the deal into question.
The contract had a potential term of up to 30 years, which is far too long for any public contract. It guaranteed a return of $34 billion over the first 20 years, but that turned out to a rate of increase roughly equal to the rate of inflation. That, in turn, rendered plausible the assertion by lottery employees that the current management arrangement could generate as much or more.
And the entire process was needlessly opaque, despite the administration's assertion that it had complied with public disclosure requirements. Because the lottery generates more than $1 billion for services used by older Pennsylvanians, it is of vital public interest. Its conversion to private management required political leadership and public salesmanship, rather than the governor's raw assertion of power that might, or might not, exist under the constitution and law.
Inherent in the failure to seek public and legislative approval is a failure to debate the vast expansion of gambling that would attend the private-sector conversion. Camelot likely would have produced its promised returns by introducing keno games and online gambling to lure new players. Whether gambling-saturated Pennsylvania should expand gambling even further in the name of government revenue itself is a subject for debate. Yet it hardly was mentioned even in the perfunctory, after-the-fact hearings that the Legislature cobbled together relative to Camelot.
If Corbett remains committed to private lottery management, he should convince the Legislature and the public of its merits rather than challenging Kane's decision in court.