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NJ Lottery Privatization is Big Money Loser

Hey Governor Christie: We told you so.

Two years ago, CWA fought back against Christie's push to privatize New Jersey's lottery operations, challenging the governor for seeking to award a 15-year contract to a private firm, run by some of the governor's cronies, for the state lottery's marketing and sales operations.

A N.J. appeals court ruled against CWA at the time, declaring that there wasn't immediate, irreparable harm.

Well, two years later, the company has lost money for the second straight year, causing a $136 million shortfall in this year's state budget. Christie had promised that privatization would allow the state to cut costs, cut public jobs and generate new sales.

Instead, according to an investigation by the Associated Press, costs of managing the lottery have skyrocketed. "Before hiring Northstar, New Jersey's lottery enjoyed unmatched efficiency compared to other states, keeping 34 cents in profit from every $1 in ticket sales. Under Northstar, expenses rose, sending profit margins down to 30 cents on the dollar for the 2015 fiscal year's $3 billion in revenue," AP reported. Northstar must pay a penalty each year it under-performs, this year about $14 million, AP noted. That means New Jersey taxpayers will pick up the tab for the rest of the $136 million shortfall.

Read more here.