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Thursday, January 17, 2013

Pa. Lottery contract dropout called process unfair | Times-News

Pa. Lottery contract dropout called process unfair | Times-News

UPDATED: JANUARY 16, 2013 11:35 PM EST

Pa. Lottery contract dropout called process unfair

HARRISBURG -- A company that dropped its pursuit of a contract to manage the Pennsylvania Lottery said it could not get some of its questions answered by Gov. Tom Corbett's administration and that a requirement that applicants submit a business plan before seeing a final copy of the agreement was unfair.

The company, Rhode Island-based GTECH Corp., made the complaints in a Nov. 6 letter to the financial consultant advising the Corbett administration in its move to hire a private lottery manager. GTECH's letter was released by state officials, who insisted Wednesday that the process was conducted fairly for all bidders and in full compliance with procurement rules.

On Friday, the administration awarded the contract to the sole remaining bidder, London-based Camelot Global Services. Before that, GTECH's identity as a bidder had been kept a secret by the Corbett administration, although Corbett administration officials had said another bidder -- GTECH, apparently -- dropped out because the proposed agreement so heavily favored the state.

But some critics of the move to hire a private lottery manager question whether the Corbett administration rushed the process or favored Camelot.

The Pennsylvania Lottery is one of the nation's largest, with $3.5 billion in sales and $1 billion in profits in 2012, and Pennsylvania is in line to become the third state behind Illinois and Indiana to hire a private manager. Corbett officials have said they planned this week to execute the lottery management contract with Camelot, although various legal challenges to it are waiting in the wings.

Tatts Group Ltd., which operates several lotteries in Australia, also withdrew from the bidding process.

In its five-page letter, GTECH listed a number of reasons why it decided to drop out. Among them were complaints that it would be held accountable for certain events out of its control that might hurt lottery profits, such as if Congress banned state lotteries from conducting Internet games.

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