Illinois Governor Bruce Rauner announced said the state recently released a request for proposal for a new private manager for the Illinois State Lottery. The Associated Press said the 10-year contract would be worth at least 0 million.
Northstar Lottery Group, the first private firm in the U.S. to manage a state lottery, will end its management effective January 1, 2017, or until a replacement is chosen, according to a termination agreement negotiated last year. Rauner’s administration said the deal saved state taxpayers about $22 million. Northstar cannot submit a bid, according to the termination agreement.
At a news conference, Rauner said, “Our Illinois Lottery has been very poorly run and failed to meet expectations for years.” Lottery officials said it took nearly a year to start the search for a new lottery manager because of the complexity of the new contract. Rauner stated it will take at least six months to select a new lottery manager under the process required by state law. He added if the bidding process doesn’t result in an appropriate new manager, the management model possibly could be changed to a “public benefit corporation” similar to lottery operations in Georgia and Tennessee. Legislative approval would be required.
Former Governor Pat Quinn hired Northstar in 2010, and the company took over lottery management in July 2011. The company had promised to significantly boost the lottery revenues, but quickly began to ask for lower revenue targets. Former Governor Pat Quinn decided to fire Northstar in 2014 following years of lower-than-promised revenues. Quinn negotiated a settlement that would have required a new management company to use GTECH and Scientific Games, Northstar’s parent companies. Illinois Attorney General Lisa Madigan blocked that settlement.
The new contract would allow the new lottery manager to use vendors of its choice. Also, it would pay up-front licensing fees, expand technology and separate manager and supplier functions.
