New Jersey lottery sales are down for a third year since being privatized.
The Record reports that operations management firm Northstar New Jersey promised a return of over $1.4 billion over 15 years when Republican Gov. Chris Christie moved the games to privatization in 2013. Since then, Northstar has missed its income projections and spent $20 million in allowance funds to cover financial shortfalls.
The firm lowered its projections by $1 billion after renegotiating a contract in 2015. However, the Office of Legislative Services says the lottery is predicted to miss its goal for 2017 as well.
The shortfall highlights the worry some legislators had when Christie moved toward privatization. Republican Gov. Bruce Rauner fired Northstar in Illinois, the first state to privatize the lottery, after the company fell half a billion dollars short of its projections. The company does not operate in any other state.
Gary Schaer, Democratic chairman of the Assembly Budget Committee in New Jersey, criticized the company's "poor track record" saying "they blame it on everything." The state pays Northstar a combination of fees and incentives that totaled $134 million last year.
Northstar declined to comment to the newspaper.
Christie is now proposing to redirect lottery funds into the public employee pension system. That move could improve the state's credit ratings.
Local
Breaking news and the stories that matter to your neighborhood.
Christie says he is not worried about the missed targets and described the shortfall as a problem plaguing lotteries across the country. However, industry magazine Insights reports all state lotteries but one — West Virginia — saw revenue gains last year.
