New Jersey can expect billion less over the life of a new 15-year contract between the state and its private lottery management firm, according to an analysis by the Associated Press.
The deal unveiled by Governor Chris Christie’s administration also lowers the amount the company must generate to avoid penalties.
According to the AP, revenue targets for the firm Northstar New Jersey have been lowered by about $76 million per year over the contract, which was first struck in 2013. The total revenue projection was decreased from nearly $16 billion to about $15 billion.
The deal does guarantee that the company, which runs the lottery’s sales and marketing, will increase the state’s take for the next three years by $30 million and capped the percentage used to calculate incentive bonuses for employees at 3 percent, down from 5 percent, the AP said.
Northstar took over the New Jersey State lottery’s sales and marketing with projections that the lottery would generate at least $1.42 billion in additional net income and remain “vigorous and successful.” However, the lottery has underperformed and had a $5 million drop in revenue in 2015.
The lottery brought in $960 million in fiscal year 2015, down from initial expectations of just over $1 billion, according to the AP.
Northstar had initially expected the state to allow video lottery terminals—which it saw as a major revenue producer—but the state has not approved them and the new contract reflects their absence.
The amended contract also cites an “unforeseen and dramatic drop” in sales of multistate games like Mega-Millions and Powerball. In November, Northstar cited national lottery figures that indicated New Jersey’s decline in revenue still amounted to the best performance in the country, at only 0.5 percent, the AP said.
A spokeswoman for Northstar said the changes were needed because of the economic landscape the lottery faces.
“We very much look forward to a long a successful business partnership and to helping the lottery meet its goals,” Northstar spokeswoman Angela Wiczek told the wire service.
