At a recent news conference, Illinois Governor Bruce Rauner said ending the contract for lottery management with Northstar Lottery Group already has saved taxpayers million. “Our Illinois lottery has been very poorly run and failed to meet expectations for years,” Rauner said. Because of the complexity of the issue, it has taken the state a year simply to start the search for a new management company.
The lottery management contract would be worth $300 million and would allow the selected company to choose its own suppliers. The 2010 agreement with Northstar—the first private management company to operate a state lottery–required the company to use Northstar parent companies GTECH and Scientific Games. Also under the new contract, the prospective management company would pay licensing fees up front, and the company would not be allowed to serve as the manager and supplier of the lottery system.
When Northstar was hired, the company promised to significantly increase lottery revenue. In fact, sales dropped, resulting in lower revenue for the state. As a result, in September 2015, Rauner reported the state reached a termination agreement with Northstar that will take effect January 1st, 2017, or later date if it takes longer for the state to find a replacement. Northstar is prohibited from participating in the bid for the contract.
