It’s pretty simple math. Two years ago New Jersey privatized its lottery.
The lottery has lost money for the last two years.
But the administration of Governor Chris Christie is defending its move to privatize the lottery even though the 15-year deal promised to raise profits by $1.42 billion over the length of the contract.
New Jersey State Treasurer Andrew Sidamon-Eristoff recently went before the state Assembly Budget Committee to defend the deal, which was seen at the time as going to a consortium of politically connected operators.
The lottery reportedly lost $24 million in the first year of the contract and as of April has lost $64 million for this fiscal year. But Sidamon-Eristoff told the panel that the lottery division is “satisfied” with the performance of Northstar, the group that won the contract in 2013.
“We believe New Jersey would be worse off but for the Northstar contract,” Sidamon-Eristoff told the budget panel.
Sidamon-Eristoff said Northstar has followed through on its commitments to staffing, sales and marketing and modernizing lottery technology.
The group has expanded the lottery’s retail network—adding Wawa convenience stores and Rite Aid pharmacies—and generated at least $165 million in new sales revenue. The group has also invested nearly $30 million in technology and “other improvements,” he said.
But Sidamon-Eristoff said lottery revenue is falling nationwide, pointing to “jackpot fatigue,” a trend where it takes larger and larger jackpots to attract casual players.
“Although net revenue to the state has not met expectations, we believe that Northstar’s investment and activities to date have in fact shielded New Jersey from the worst of what is clearly a national scale, industry-wide decline in lottery sales and net revenues,” Sidamon-Eristoff said.
Sidamon-Eristoff said the state is committed to its relationship with Northstar.
