UK Lottery promotion at St. George’s Hall in Liverpool

The Camelot Group of Companies, the licensed operator of the UK National Lottery, has submitted a bid to run the Pennsylvania Lottery, which the state is attempting to outsource through a Private Management Agreement (PMA).

Camelot has submitted a priced bid that includes 20 years’ worth of annual profit commitments. The bid is valid until Dec. 31, 2012, and is supported by $50 million in bid security the state would retain if the bidder is awarded the PMA but fails to execute the contract.

“The receipt of a priced bid represents an important milestone in this process, which began last April,” said Dan Meuser, revenue secretary for the state. “While there are several additional steps before we’ll be prepared to make a final decision, this is a proposal that warrants a complete and detailed review, and it is encouraging to see the potential private manager propose 20 years of significant profit growth.”

Now that a binding bid has been received, the state will consider the bid against historic and projected Pennsylvania Lottery performance data to ensure the bid provides incremental profit growth above what the lottery could achieve on its own. Additionally, risk mitigation firm Kroll Advisory Solutions will conduct a full investigation-delving into criminal history, financial history, reputation, business practices and contractor integrity-into Camelot and its executives. Kroll’s findings will be used to evaluate the suitability of the bidder before a private management agreement would be executed.

Pennsylvania is also engaged in discussions with the union representing lottery employees consistent with the union contract. The state will evaluate and consider any alternate plan the union may propose prior to making a final decision.

The state began exploring a PMA for the Pennsylvania Lottery last year as a way to maximize lottery profit and ensure secure, predictable funding for programs benefitting a dramatically growing senior population. The lottery was created in 1971 to generate funds for programs benefitting older adults. Since 1972, when its first game went on sale, the Pennsylvania Lottery has contributed nearly $22.6 billion to programs for seniors. The Pennsylvania Lottery remains the only U.S. Lottery that exclusively designates all proceeds to programs benefitting older residents.

The Camelot Group of Companies has more than 18 years of experience in running lotteries. In the United Kingdom, Camelot is the licensed operator of the National Lottery and is committed to raising money-£29 billion to date-for the Good Causes, the UK beneficiaries of the lottery. In 2010, one of the world’s largest single-profession pension plans, Ontario Teachers’ Pension Plan, acquired the Camelot Group of Companies.