By Mike Dougherty
TRENTON, N.J. (CBS) – The Christie Administration announced plans to award New Jersey’s lottery contract to a private company Friday.
Part of the deal has the company, Northstar New Jersey Lottery Group, handing over $120-million to the Garden State for the privlige of taking over all marketing and sales operations.
“The objective is to make the lottery a stronger operation, more competitive in the gaming market to make sure that it will be able to contribute to state revenue.”
Bill Quinn with the NJ Treasury Department says Northstar has committed to generating a minimum of $1.42-billion over the life of the 15 year contract.
“They think they’ll be able to do better than that and hit a higher target.”
Quinn says $1.42-billion is well beyond what the state would expect to see if operations remained the same and the state’s net income could be as high as $6-billion over 15 years.
State law requires a minumum of 30-percent of lottery revenue to stay with the state, the actual percentage Northstar forks over will be based on a formula and how much they take in.
The contract is not official until it’s signed and that can’t happen for at least two weeks so groups who oppose the plan can protest.
One group trying to block the deal is the Communication Workers of America who say this is illegal and could cost tax payers and small business owners lots of money — as well as jobs for some of the 40,000 state workers the CWA represents.
CWA New Jersey legislative director Seth Hahn believes the contract in New Jersey will be similar to a contract Northstar currently has with Illinois, and they fell $100-million short of projected revenue in the first year of that deal.
“They turned around and said that the tax payers of Illinois owed them $230-million more because there were problems with implementing the handover of that contract.”
Hahn is unhappy with the connections between the Christie Administration and Northstar’s parent company GTECH.
“They hired the firm that was headed by the guy who ran Christie’s campaign and they also hired the firm that was run by the cheif lawyer to his campaign.”
He says Northstar was the only company to make a bid for the lottery contract because others apparently thought it was a foregone conclusion.
Hahn thinks corner stores and convenience stores that rely on lottery sales to get customers in the door will suffer once big box stores are allowed to get in the game. He also doesn’t get the need for privitization because the Garden State already has one of the most efficient lottery programs in the country.