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Corbett’s Privatization Initiative Hits Lottery

The Corbett Administration is taking steps to privatize the management of the Pennsylvania Lottery.

Pennsylvania Revenue Secretary Dan Meuser said the move is part of an effort to increase profits, which benefit programs for the elderly.

Meuser said, over the last five years, lottery net profits have grown an average of 0.3 percent per year and revenues are projected to grow an average of 1 percent annually through 2014-15. He said that's not enough to cover cost increases.

Last year, the Pennsylvania Lottery made about $3.2 billion. About a third of that amount went to programs for older Pennsylvanians such as subsidized prescription drugs and free transit rides.

Federal law would require the commonwealth to still own and audit the lottery, but its operations could be taken over by a private company.

Senate Majority Leader Dominic Pileggi said he imagines this kind of move would require approval by lawmakers.

"It would depend on the specific menu of services that would be privatized or functions that would be privatized. It's, again, too early to tell," Pileggi said.

The Corbett Administration said the interest in outsourcing the Lottery's operations comes from a need to make the revenue for elderly Pennsylvanians more stable.

David Fillman, director of the AFSCME union that represents the majority of the 233 employees of the Pennsylvania Lottery, said he hopes that is the case.

"This is a profitable agency that has proceeds go to senior programs, prescription programs for senior citizens, and, as a union, we wouldn't want any of that to start going into the pocket of a private outfit instead of going into the pocket of senior citizens," Fillman said.