New Jersey’s lottery sales are falling and the private company running the lottery will miss its target goals for a third straight year, according to a report at NorthJersey.com.
This comes as New Jersey Governor Chris Christie has proposed redirecting revenue from the lottery to offset shortfalls in the state’s public employee pension fund. Christie also pushed for privatization of the lottery.
Northstar New Jersey—which got the lottery contract—promised during the bidding process that giving it control of the lottery’s essential functions would return “at least” an extra $1.42 billion to the state over 15 years. As part of the contract, awarded in 2013, Northstar paid the state $120 million to support its budget, according to the website.
Northstar, however, failed to meet its revenue projections for the first two years of the contract and then renegotiated its revenue projections reducing them by $1 billion.
According to the report, Northstar is on track to fall short of even those lower targets.
Christie’s administration and the Office of Legislative Services project that in June—when the state’s fiscal year ends—New Jersey will receive $970 million from Northstar. That’s $20 million short of the $990 million income target in the amended contract.
Northstar officials declined to comment for the report.
Christie told the website—which includes the Bergen Record newspaper—that he isn’t worried about the group’s performance.
“Northstar put forth some very aggressive projections of what they would do, and they are coming very close to reaching what are really aggressive projections,” he said. “No, I don’t have any concern with what Northstar’s been able to do. And if you look across the country, this is a pattern that’s been happening with lotteries across the country.”
The report noted that while many state lotteries have seen declines in big-jackpot games such as Powerball and Mega Millions, all but West Virginia posted revenue gains in the 2016 fiscal year, according to Insights, an industry magazine.
New Jersey, however, is one of the few states whose lotteries are run in some part by a private entity. Northstar is also paid a variety of fees, reimbursements and incentives, which totaled $134 million last year, the report said.
