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Revenue dept. moves forward to privatize state lottery

By , - Last modified: June 13, 2012 at 11:46 AM

The Pennsylvania Department of Revenue is moving forward in a process to privatize the day-to-day operation of the Pennsylvania Lottery, enlisting its current machine operator and scratch-off vendor to assist in the search for management firms.

The state sent out a request in April for qualified companies. The response since then convinced the department, which oversees the lottery's programs, that moving forward with the process would benefit the state, it said Tuesday in a statement.

The department is refusing to release the number or names of companies it's talking to in the process ahead of bidding, holding that confidentiality will better serve competition, spokeswoman Elizabeth Brassell said.

The state will continue to own the lottery and any management contract would require the company to demonstrate it will increase lottery revenue to benefit programs for older Pennsylvanians, according to the department.

It's too early to speculate on how such a management contract would affect employment at the lottery, Brassell said. The department intends to keep lottery employees and the union representing them — the American Federation of State, County and Municipal Employees —informed on the process, she said.

The state's instant ticket and scratch-off game vendor, New York-based Scientific Games Corp., will be a consultant in the management firm search. If the state executes a management agreement, Scientific Games will continue as the lottery's exclusive supplier of vending and technology services until December 2018, per its contract. A second contract ends in August 2017.

Scientific Games has not submitted its qualifications for the management contract and will not bid on such a contract because of its consulting role with the state in this process, the company said in a statement.

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