Six Democratic congressmen have asked the U.S. attorney general to review the contract that would place the New Jersey Lottery in private hands.
The lawmakers want to know if a $120 million payment violates a 2008 Justice Department opinion which said a state should not receive any upfront payments to prevent corruption or the appearance of corruption.
The state Treasury Department last week announced it intended to award a 15-year sales and marketing contract to a joint venture to run the nation's eighth largest state lottery.
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Northstar New Jersey Lottery Group agreed to pay $120 million upon signing.
The Treasury Department told The Record newspaper in a statement that the state attorney general's office and outside legal specialists reviewed the deal. The department believes it is valid.
New Jersey isn't the only state looking to privatize its lottery. Pennsylvania is looking to take its $3.5 billion lottery private.
That bid is on hold, though, as the state reviews how British-based Camelot plans to expand the Commonwealth's lottery.
Indiana and Illinois have also awarded contracts to private lottery managers.