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Report: Ill. lottery manager short $100M on profit

Illinois LotteryIllinois Lottery: Report: Ill. lottery manager short $100M on profit
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SPRINGFIELD, Ill. — The Illinois Lottery's private manager fell nearly $100 million short of the profits it promised to deliver for the state.

But the Chicago Tribune reported Tuesday that revenues generated by Northstar Lottery Group still set an Illinois record. Illinois has fallen behind other state lotteries for years.

Northstar promised $825 million in net revenue when it took over the lottery in July 2011. A Tribune analysis found it had collected $726 million by the end of June.

That could mean hundreds of millions of dollars in penalties. The same month the company got the contract, it began seeking a reduction in what it promised. An arbitrator will decide the matter.

Thanks to Coin Toss for the tip.

AP

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12 comments. Last comment 2 years ago by mcginnin56.
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zinniagirl's avatar - flower avatar_0026.jpg
nc
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October 26, 2010
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Posted: August 2, 2012, 10:22 am - IP Logged

Wonder if they will blame it on the increase in PB prices?   Or will they be man enough to say, we inflated our projected profits to get your contract?

    dpoly1's avatar - driver
    PA
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    October 16, 2008
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    Posted: August 2, 2012, 10:31 am - IP Logged

    OOOOOOOOOOOOOOOPS!

    dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

     

    Eschew Poverty ........... Vote Conservative!


      United States
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      May 25, 2011
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      Posted: August 2, 2012, 10:40 am - IP Logged

      The Illinois Lottery's private manager fell nearly $100 million short of the profits it promised to deliver for the state.

      But the Chicago Tribune reported Tuesday that revenues generated by Northstar Lottery Group still set an Illinois record. Illinois has fallen behind other state lotteries for years.

      Northstar promised $825 million in net revenue when it took over the lottery in July 2011. A Tribune analysis found it had collected $726 million by the end of June.

      That could mean hundreds of millions of dollars in penalties. The same month the company got the contract, it began seeking a reduction in what it promised. An arbitrator will decide the matter.

      Thanks to Coin Toss for the tip.

      Still a great performance considering Illinois's lousy sales for many years. Thumbs Up

        Avatar
        Seattle, Washington
        United States
        Member #121158
        January 3, 2012
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        Posted: August 2, 2012, 6:37 pm - IP Logged

        I've been waiting to see if there's any blowback from Powerball upping their cost from $1 to $2; this may be the first sign of an issue.  I know powerball's idea was "bigger initial jackpot, quicker to huge jackpots where more people play, more publicity, more money to states & vendors"; I'm thinking this might not be the case afterall...

          rdgrnr's avatar - walt
          -Ridge Runner- Oracle of the Appalachians
          Way back up in them dadgum hills, son!
          United States
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          Posted: August 2, 2012, 7:11 pm - IP Logged

          "The same month the company got the contract, it began seeking a reduction in what it promised."

          Now, that there is what you call one of them there "red flags".

          Now, right there somebody shoulda said: "Hold 'er Newt! She's headed fer the barn!"

          Dadgum straight, JimBob.


                                                       
                               
                                                   

           

           

           

           

                                                                                                             

          "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                      --Edmund Burke

           

           

            JonnyBgood07's avatar - Patriots logo1.jpg
            Connecticut
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            Posted: August 2, 2012, 7:15 pm - IP Logged

            Wonder if they will blame it on the increase in PB prices?   Or will they be man enough to say, we inflated our projected profits to get your contract?

            I Agree!

            "...Life is not a matter of holding good cards,but sometimes playing a poor hand well...
            'Fortune Cookie wisdom'

             


              Cletu$2's avatar - Lottery-050.jpg
              S.E.Iowa
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              December 21, 2011
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              Posted: August 2, 2012, 8:44 pm - IP Logged

              "The same month the company got the contract, it began seeking a reduction in what it promised."

              Now, that there is what you call one of them there "red flags".

              Now, right there somebody shoulda said: "Hold 'er Newt! She's headed fer the barn!"

              Dadgum straight, JimBob.

              They just didn't know who's palm to grease,in Illinois it could be any number of officials from the govenor on down.So they decided to inflate the numbers to get the contract and immediatly started to back pedal once the ink on the contract was dry.It should be interesting to see how this plays out.

              When I was a boy I was told that anybody could become President; I'm beginning to believe it. ~Clarence Darrow

              There ought to be one day - just one - when there is open season on senators. ~Will Rogers

                Littleoldlady's avatar - basket
                Clarksville
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                Posted: August 3, 2012, 7:59 am - IP Logged

                If they are short about 100 million, how can the possible penalties be hundreds of millions?  Makes no sense to me.

                If you know your number is going to hit, have patience and then KILL IT!

                You never know when you will get another hit.

                  Coin Toss's avatar - shape barbed.jpg
                  Zeta Reticuli Star System
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                  Posted: August 4, 2012, 12:59 am - IP Logged

                  Not much they can do with the numbers games unless they reduce the payouts.

                  I'm thinking maybe they are really going to get tight with the scratchers.

                  Ironic kind of, Quinn (Gov.) insisted on letting Northstar run the lottery. Let's say the lottery itself was the jackpot, the state running it every year was the annuity, and Northstar was the 'cash option'.

                  The players should always take the cash and the state should stick with the annuity!

                  Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                  Lep

                  There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

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                    NY
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                    Posted: August 5, 2012, 3:12 am - IP Logged

                    Wonder if they will blame it on the increase in PB prices?   Or will they be man enough to say, we inflated our projected profits to get your contract?

                    They can try to blame it on PB prices, but that's not going to be a very good strategy, since overall sales are up. There were 3 jackpots that weren't fully funded yet, but the actual loss of profit to Illinois was only a tiny fraction of the $100 million difference. That minor reduction in profit was probably offset by increased profit from the higher sales.

                    The real question is the details of what they "promised", whether or not the state changed anything that affected the profit, and the details of the overall agreement.

                      Avatar
                      NY
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                      Posted: August 5, 2012, 3:14 am - IP Logged

                      If they are short about 100 million, how can the possible penalties be hundreds of millions?  Makes no sense to me.

                      It's because they're paying penalties for not delivering what they promised, not just making good on the promises. The company agreed to those penalties, so they've got to make good on the penalties instead of just the profit they didn't generate.


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                        Posted: August 5, 2012, 3:10 pm - IP Logged

                        It's because they're paying penalties for not delivering what they promised, not just making good on the promises. The company agreed to those penalties, so they've got to make good on the penalties instead of just the profit they didn't generate.

                        I Agree!