Newspaper article The Record (Bergen County, NJ)

Lottery to Fall Short Again under Private Operator

Newspaper article The Record (Bergen County, NJ)

Lottery to Fall Short Again under Private Operator

Article excerpt

With two weeks left in the fiscal year, state officials acknowledged Thursday that the lottery is unlikely to meet its budget projections despite nearing record ticket sales and the addition of more retailers.

The shortfall would be the second in the two years since Governor Christie outsourced the lottery's sales and marketing to the conglomerate Northstar New Jersey, a move that was contested by the Democratic-controlled Legislature. Northstar has also revised its net income targets downward five times in that period - once in 2014, twice this year and twice for the 2016 fiscal year.

Total ticket sales for 2014 were $2.9 billion, according to the lottery's annual report. But after prize payouts, retailer commissions, fees and administrative costs, that meant $965 million went to the state budget. State law requires at least 30 percent of gross ticket sales go toward aid for public education and state programs.

With the lottery missing its budget projection this year, that could mean less money than expected for those state programs.

State officials and the Christie administration point to weak national sales of the two major multi-state lottery games, Powerball and Mega Millions, and a phenomenon called jackpot fatigue, in which it takes larger and larger jackpots for casual customers to play those games, as uncontrollable factors for these latest missed budget targets.

Northstar, which signed a 15-year contract with the state two years ago this week, had projected income of $1.047 billion for the 2015 fiscal year, but revised that figure down twice - first to $955 million, then, last month, to $930 million. Those revisions are in addition to the group's cutting its income projections in 2014, known as a "stub year" since Northstar did not run marketing and sales for the whole fiscal term, from $760. …

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