By David Cruz
NJ Today
It’s not as if the idea of privatizing the New Jersey Lottery was a big secret. The $120 million the state will get from the deal up front was already anticipated in the governor’s budget. But aside from that $120 million figure, little else is actually known about the terms of the deal, which is leaving some critics to wonder why, if it’s so great, would the administration bury the announcement, as it did, late on a Friday afternoon.
“Do we have anything to compare it to? No. There was only one bidder. Are we getting the best deal? We don’t know. Is this a good thing for the state of New Jersey? We don’t know,” said Assembly Budget Committee Chairman Vincent Prieto. “This is a tremendous asset that the state of New Jersey has. It’s about three percent of our total revenue.”
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The state treasurer says the deal with Northstar New Jersey — a joint venture of lottery operators GTECH, Scientific Games and the Ontario Municipal Employees Retirement System — will net the state $1.4 billion over its 15-year life. Last year, the lottery earned $950 million for the state. The new operators promise to raise that revenue by $93 million every year, which supporters, like Assembly Minority Leader Jon Bramnick, say is nothing to sneeze at.
“NorthStar is going to provide the technology and update the technology at no additional cost, and that’s going to be beneficial to the retailer to make it easier for them to sell tickets,” said Bramnick, “and it’s going to be better for the state and optimize what we call revenue for the state to pay for the projects that are so important.”
But Prieto says local retailers will be adversely affected if — as they did in Illinois — NorthStar increases the number of lottery outlets in big box stores, which will hurt the little guys who rely on lottery customers to pick up other stuff like milk and eggs.
“That’s about 6,000 locations,” warned Prieto. “If you figure they have to lay off one person, that’s 6,000 jobs right there.”
A TV ad by the Communications Workers of America says the 150 full- and part-time employees at the state lottery will lose their jobs. We couldn’t confirm that today because neither the governor’s office, the state treasurer or the state lottery director would speak to us. The CWA says it’s contemplating legal action to stop the deal. Sen. Barbara Buono says under then-governor Richard Codey, she looked at the possibility of privatizing the lottery.
“We had hearings,” she said. “It was a very transparent process and experts from all over the country came in and weighed in on it, and we came to the decision that it didn’t make financial sense for the state of New Jersey to privatize that asset.”
Like a lot of privatizations deals, this one comes with an attractive up front payment, but whether it turns out to be good deal for the state in the long run, could just depend on luck.