N.J. may privatize parts of state lottery operation

New Jersey wants to outsource some of the functions of its state lottery.

The state is requesting proposals from private companies to manage the lottery sales, marketing and development of its games.

A private contractor could generate significant growth in lottery revenue, according to Bill Quinn, spokesman for the stare Treasury Department.

“The state lottery operates under an annual budget appropriation so it’s often limited in what type of efforts it can put in to developing new products, getting them to market,” Quinn said. “It can also incentivize the sales force, give them motivation to hit sales targets. That’s something the lottery can’t do currently with its sales force.”

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Analysts are concerned that the state would have to share lottery revenue with a private operator.

That’s the down side to outsourcing some lottery operations, says Patricia McQueen, a gambling industry analyst.

“No private company is going to come in if they can’t make money at it. So you’re basically sharing whatever profits the lottery is generating with somebody else,” she said. “Yes, you’re getting money up front. But then you’re obviously giving up some over the years because obviously those companies want to make money.”

Quinn says contract provisions would ensure that at least $950 million a year from lottery operations continues to go into the state budget.

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