NJ May Allow Private Firm to Run State Lottery

The Communications Workers of America (CWA) has vowed to challenge the Christie administration’s decision to partially privatize the New Jersey Lottery by awarding a contract to a consortium similar to one that remains under fire in Illinois.

Last Friday afternoon, the state treasurer’s office announced plans to award a 15-year contract to Northstar New Jersey Lottery Group to take over marketing and sales of the $2.8 billion state lottery.

The joint venture that includes GTECH Corporation (41 percent owner), Scientific Games International (18 percent owner) and a unit of the Ontario Municipal Employees Retirement System (41 percent owner) was the sole bidder and, as part of the terms of the deal, has agreed to make an upfront $120 million payment to the state.

The contract, about nine months in the works, has been controversial for a number of reasons.

Democrats in the Legislature have been complaining about the administration’s secrecy involving the matter. Convenience store owners have said it could hurt their businesses. And the state workers’ union fought it because it could mean unemployment for about 60 lottery workers. The CWA has vowed to keep fighting the move in court.

“We are contacting the head of the New Jersey State Lottery immediately to challenge the Christie administration’s giveaway and will take every action at our legal disposal to stop it,” said Seth Hahn, legislative and political director of the CWA in New Jersey. He called the privatization “illegal.”

Bill Quinn, a spokesman for the Department of Treasury, said the action the department took on Friday was to sign a notice of intent to enter into the contract. There is now a 10-day period in which any citizen or other bidder – in this case, there are none – can protest the contract before state officials sign it.

Barring a successful legal challenge, there would be a nine-month period of transitioning from state workers to the private contractor doing the sales and marketing tasks. It is during that time that the contractor would determine how many state lottery workers it might hire.

Once the contract is signed, the $120 million one-time payment is expected to be made by June 30, Quinn said. That will help the state plug a revenue shortfall in the current budget. The state has already announced it is delaying $400 million in property tax rebate payments from May, near the end of the current budget year, until August.

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