HARRISBURG, PA ? Following last week?s report of record profits for the year, the Pennsylvania Lottery is treading cautiously with its privatization efforts, the Pittsburgh Post-Gazette reports.
Pennsylvania Lottery officials are studying carefully the Illinois Lottery and its just completed first year under a private manager, where profits fell far short of the sales figure that private lottery management firm Northstar Lottery Group promised before taking control of the state?s lottery.
Because Northstar missed its revenue target, it could be liable for paying millions in penalties, though the firm is seeking to adjust that amount to lower its liability.
"We're keeping an eye on what's going on Illinois, as well as in other states exploring other private management systems," said Department of Revenue spokeswoman Elizabeth Brassell.
Brassell said Pennsylvania officials are seeking "realistic, competitive bids" that will make the lottery more financially secure.
The Pennsylvania Lottery realized a $100 million increase in net revenues over the previous year, for a total of $1.06 billion in the fiscal year ending June 30. Applicants for the privatization effort must demonstrate how they?ll be able to improve those figures.
"It definitely is going to set the bar a little bit higher for potential bidders," Brassell said. "It's not entirely unexpected but hard to predict. We're hoping to smooth out the high highs and low lows if we engage a private manager."
State Democrats have expressed skepticism of the privatization proposal, pointing to the record profit figures as an example of the current system?s success.
"The lottery is doing quite well, and there's nothing that the current folks can't do that these new people coming in can, other than to skim profits off the top," said House Minority Leader Frank Dermody.