NJ Signs Deal to Privatize Parts of State Lottery

Friday, Jun 21, 2013  |  Updated 4:22 PM EDT
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Deal Signed to Privatize Parts of State Lottery

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State officials announced Friday that New Jersey has signed a contract to outsource part of its lottery operation and has collected $120 million from the vendor as part of the deal.

The contract calls for the vendor, a consortium called Northstar New Jersey Lottery Group, to bring the state government $1.4 billion to $6.9 billion in extra revenue over the 15-year life of the contract.

New Jersey Lottery Executive Director Carole Hedinger said the deal will result in new games for customers and services for retailers.

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Some Democrats and the union that represents lottery workers have objected, in part because Northstar was the only bidder for the contract. The firm is owned by Providence, R.I.-based GTECH Corporation, Alpharetta, Ga.-based Scientific Games International and OSI LTT NJ Holdings, which is part of the Ontario Municipal Employees Retirement System.

The critics also don't want to see state employees lose their jobs. The state says about 60 of the 129 current lottery jobs will be eliminated through the contract, though Northstar has pledged to interview them for jobs at the company. State Treasury Department spokesman Bill Quinn also said the state will try to find jobs elsewhere in the government for those who don't get offers from the company.

The Communications Workers of America had sued to stop the deal, but a court ruling last week allowed the state to move ahead with the contract. While the contract was allowed to be struck, the court is still planning to delve more deeply into the issues and there is a chance it could be undone.

Getting the contract signed now was important because Gov. Chris Christie's administration was counting on the front-end payment to balance the budget for the fiscal year that ends June 30.
 

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