The chairman of the New Jersey Assembly's budget committee said on Tuesday he will convene a hearing this fall into the private lottery operator that missed its revenue targets two years in a row.
TRENTON -- The chairman of the New Jersey Assembly's budget committee said Tuesday he will convene a hearing this fall into the private lottery operator that has missed its revenue targets two years in a row.
The company, Northstar New Jersey, fell $107 million short of its projections in the last fiscal year and $55 million short the year before, the first partial year on the contract.
"Rather than find ourselves next year in a similarly precarious position for the third time and let history repeat itself, we must take action now to better understand the clear and obvious failings of the Northstar contract," Assemblyman Gary Schaer (D-Passaic) said in a statement.
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Gov. Chris Christie signed the deal with Northstar in July 2013, making New Jersey the third state to hire a private firm to help run its lottery in hopes of boosting sales. Under the contract, Northstar took over sales and marketing.
It paid the state $120 million up front and promised to generate at least $1.42 billion more over the next 15 years. The group gets to keep a share of the increased profits.
Schaer similarly called for a review of the privatization contract last November after it was first reported the company missed its projections and had secured a contract amendment reducing its revenue goals four months into the deal.
The lottery is New Jersey's fourth-largest revenue source, generating money for scholarships, psychiatric hospitals, centers for the developmentally disabled and homes for disabled veterans.
Christopher Santarelli, a spokesman for the Treasury Department, said Northstar "is held accountable for its performance." The company was penalized in 2014 and will be again in 2015 if it misses its financial targets.
"As it does with any vendor, the New Jersey Lottery will always do what is in the best interests of its citizens and beneficiaries," he said.
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.
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