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Pa. considers expanding lottery gambling to Web

Associated Press Modified: November 9, 2012 at 7:30 pm •  Published: November 9, 2012

In April, the Corbett administration issued a request for qualifications from interested companies.

Currently, the 40-year-old Pennsylvania Lottery is run by the Department of Revenue, and profits benefit programs for the elderly, including transit, rent and property tax rebates, prescription drug assistance, senior centers and long-term care services.

Northstar Lottery Group, a partnership between GTECH and Scientific Games, took over management of Illinois' lottery with promises to boost sales and revenue. The group gets a $15 million-a-year management fee and a percentage of profits it produces above a certain level. In its first year, Northstar Lottery Group brought in record revenue but fell nearly $100 million short of the $825 million it had promised to Illinois officials.

Pennsylvania would require the winning bidder to set aside $150 million should the bidder fall short of its profit promise.

The Pennsylvania Lottery does not include keno in its lineup of games, as do some states — Georgia, Massachusetts and New York — with higher per-capita lottery sales, according to the administration's request for qualifications. Michigan, for instance, counted $490 million in Club Keno revenue in 2010 — about 20 percent of its total — after introducing it in 2003.

Online gambling is considered the new frontier for a more lucrative lottery, thanks to a U.S. Justice Department opinion issued in December in response to a query by Illinois and New York about whether federal law prevented them from selling lottery tickets online to adults within their states. The department answered that the Wire Act only prevents players from wagering on sports outcomes, but other bets are OK.