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Treasurer McCord Questions Legality of Payments to Private Manger for Lottery Expansion By Globenewswire

HARRISBURG, Pa., Dec. 12, 2012 (GLOBE NEWSWIRE) -- State Treasurer Rob McCord today notified the Pennsylvania Lottery that depending upon the nature and extent of lottery expansion under a private management contract, his office would refuse to disburse payments to a private operator unless and until he is satisfied that the contract expenditure is lawful.

McCord raised his concerns in a letter to Secretary of Revenue Dan Meuser. He noted that the draft Private Management Agreement (PMA) engages a company to perform services intended to increase annual lottery revenue, in part by introducing new market opportunities. The agreement is vague, however, regarding what kinds of market opportunities the prospective manager will pursue. Some types of gaming expansion could require legislative authorization -- or approval of the Pennsylvania Gaming Control Board.

Lacking such authorizations, McCord's office could be legally barred from making payments of public money to the contractor. The state Fiscal Code, as part of a system of financial checks and balances, gives the state Treasurer the responsibility to make sure that all disbursements of public funds are "lawful and correct." Under those provisions, the Treasurer is required independently to audit all requests for payment from the Lottery Fund.

"Accordingly," McCord wrote in his letter to Meuser, "please be advised that I will not authorize the expenditure of public funds for lottery expansion unless I am satisfied such an expenditure is legally permitted under existing law."

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