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NJ Lotto Privatization Is a Loser

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December 3, 2015

New Jersey Gov. Chris Christie's gamble to privatize the state's lottery operations is backfiring.

The contractor, Northstar New Jersey, continues to fall short on its promises to boost sales and payments to the state. This fiscal year, the state lottery contributed $960 million to state programs – less than the nearly $1.037 billion budgeted. That's tens of millions of dollars that would have funded public education and programs for the disabled and military veterans.

And just two years into the 15-year contract, skeptical state lawmakers hauled lottery officials before the Senate Legislative Oversight Committee this week to question Northstar's handling of the lottery's marketing and sales operations.

"I don't think we're really getting the bang for the buck," said State Sen. Bob Gordon.

While CWA currently represents some lottery employees, 64 union workers' jobs were eliminated in the 2013 privatization.

At the hearing, Seth Hahn, CWA's New Jersey political director, pointed out that Northstar was the only bidder on the lottery contract. Its failures are the result of "politically-connected firms shoveling large sums of money to powerful operatives close to the governor," he said.

This contract, he stressed, is "everything that is wrong with politics in New Jersey."

"It involved…an up-front payment designed to protect the state from losses that instead turned into a one-shot gimmick to plug an election year budget hole, and now there is a shortfall of money going to vital services in New Jersey while private companies still get their cut, despite under-performing the public employees they replaced," Hahn said.