Saturday, December 31, 2016

Marie Corfield: Who Really Wins in Privatization?

Marie Corfield: Who Really Wins in Privatization?:

Who Really Wins in Privatization?

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Who was the biggest lottery winner in NJ in 2016? Not Joe Schmoe. Not the people in that office pool. Not even that kid in Newark trying to get into that charter school. Nope, it was the lottery company itself. Today's Star Ledger ran this story about Northstar New Jersey, the private company that Gov. Christie handed the once state-run lottery operation over to in 2012:



The private gaming joint venture that operates New Jersey's lottery received a more than $30 million bonus despite having originally over-promised a billion dollars in revenue at the start of its contract, its latest annual report shows. 
Northstar New Jersey, which oversees Powerball, MegaMillions as well as various scratch off games, was paid a $30.6 million incentive for reaching contractual obligations that were renegotiated downward in February to more easily attainable goals. 
At the urging of Gov. Chris Christie in 2012, the state entered into a 15-year contract with Northstar under which the gaming venture committed to sending "at least" $1.42 billion in additional income back to New Jersey in exchange for its making an upfront payment of $120 million in 2013. Northstar was the only bidder on the contract. 
That agreement was short-lived, however. 
After Northstar fell short of its promised income targets two years in a row, it renegotiated its contract with the state. In Feb. 2016, the company's financial targets were lowered by $1 billion through 2029, about $76 million less a year.
In 2013, Northstar had been forced to tap into a $20 million reserve established at the 
Marie Corfield: Who Really Wins in Privatization?:


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