N.J. Lottery Missing Goals With Private Operator

26 November 2014FinancePolitics

Elise Young, reporting for Bloomberg:

Northstar New Jersey Lottery Group’s revenue fell short $24 million in the year ended June 30, even after Governor Chris Christie let the company cut the target. Lottery collections, the state’s fourth-largest revenue source, were down 9.2 percent from July 1 through Oct. 31. The forecast calls for annual growth of 7.4 percent.

Christie, a second-term Republican considering a 2016 run for president, said in 2013 that a private operator would help the state as tax collections fell short, and he defied opposition from Democrats and unions representing lottery workers. The sole-bidder contract included a $120 million upfront payment to the state.

While the private lottery operator has been in place for only a year and the promised benefits are to be realized over the course of a 15-year contract, this is looking like a short-sighted deal. Relying on a sole bidder certainly doesn’t win any good governance points either.