China lotteries outdo Macau; Camelot awarded Pennsylvania Lottery contract

china-camelot-pennsylvania-lotteryMacau’s casino revenue rose 14% to a record MOP 304b (US $38b) in 2012, but that was outdone by China’s lottery industry, which rose 18% to a record RMB 261.5b ($42b) last year. While impressive, the lottery growth is down sharply from 2011’s rate of 32%, and below the 25% recorded in both 2009 and 2010. However, the last three months of 2012 were on an upswing, and December’s tally was up 19.2% over the previous year. The Welfare Lottery earned the lion’s share (RMB 151b) of the total, while the Sports Lottery took in RMB 110.5b.

Over in the UK, the money-losing Weather Lottery has managed to lose less money. The AIM-listed firm reported that it reduced its annual loss to £291k from £789k, despite the fact that its turnover fell 15% to £1.14m following the elimination of “certain loss-making gambling activities.” That would be the Weather Lottery’s ill-advised FC Betz subsidiary, as the company claims its lottery business actually turned a £238k profit.

Pennsylvania has issued a “notice to award” the right to operate the Pennsylvania Lottery to UK National Lottery operator Camelot, making Pennsylvania the third US state (after Indiana and Illinois) to hire a private lottery manager. The deal is for a 20-year term, with possible extensions of up to 10-years dependent on Camelot hitting certain performance benchmarks. Camelot Global Services PA LLC was the sole formal bidder for the contract, although the American Federation of State, Country and Municipal Employees (AFSCME) union submitted a late protest bid shortly before the contract was awarded.

Opposition Democrats are upset because Pennsylvania Gov. Tom Corbett knew a state Senate oversight panel was set to hold a public hearing on the lottery issue on Monday at 10am. Both Democrats and AFSCME believe the privatization process had been handled with unnecessary secrecy and have vowed to do what they can to block Camelot from taking over. State Treasurer Rob McCord has said he may withhold payments to Camelot over concerns the company’s plans to expand the lottery’s scope go beyond what current law permits. It’s worth noting that McCord, a Democrat, is believed to be a potential challenger for Corbett’s job when his present term as governor ends in 2014.