Lottery contractor falling short of New Jersey expectations

The New Jersey Lottery has missed revenue projections since the Christie administration signed a 15-year contract to outsource its sales and marketing.

 

A Senate committee held a four-hour hearing to examine how Northstar is carrying out those  functions.

New Jersey Lottery executive director Carole Hedinger said Northstar provided the technology to increase instant ticket sales that prevented enormous losses from a national decline in multistate jackpot games.

“I’m extremely comfortable with the services that we are getting right now, more comfortable than I’ve ever been before,” she said Tuesday.

Northstar General Manager Russell Knapp said the health of national games will play a big part in future growth.

“The Powerball game was changed last month, and we anticipate that will have a positive result and get us back on track,” he said.

While lottery revenues are increasing, Senate Legislative Oversight Committee Chairman Bob Gordon said Northstar’s administrative costs are also up.

“I don’t think we’re really getting the bang for the buck,” said Gordon, D-Bergen. “It raises questions as to whether we could have done this on our own.”

Though he’s disappointed with its performance, Gordon is not urging that the contract with Northstar be cancelled.

“Let’s see how the numbers look over the next year or two,” he said. “There’s fortunately provisions built into the contract that would allow the state to terminate.”

The lottery is an example of flawed oversight of the state’s contracting process, Gordon continued.  He’s proposed legislation to require a cost-benefit analysis before contracts to outsource services are awarded.