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Illinois Lottery seeks to collect $20 million from operator Northstar Lottery Group

Illinois LotteryIllinois Lottery: Illinois Lottery seeks to collect $20 million from operator Northstar Lottery Group
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But the lottery has not shown Northstar the final audit numbers

The Illinois Lottery said Monday it is entitled to a $20 million payout from Lottery private manager Northstar Lottery Group because the group fell short of the total Illinois Lottery income Northstar said would be generated in fiscal year 2012.

Noted Illinois Lottery Superintendent Michael Jones: "Northstar won the private manager contract by projecting a net income of $851.2 million in FY12, but failed to reach this goal, consequently triggering a $20 million net income shortfall to the state. Northstar missed their initial net income commitment by $94 million. Our agreement requires Northstar to be held accountable for this shortfall."

The Illinois Lottery said Northstar only managed to generate $757 million in revenue in FY12. Jones said the Lottery plans to recoup the shortfall by withholding future monthly payouts that Northstar regularly receives as part of its management fee for operating day-to-day operations of the Lottery.

Despite the issues surrounding Northstar's failure to generate the revenue it had stipulated, Jones went on to suggest he expected better days ahead for the relationship between the Lottery and private manager Northstar, which includes new management not in place when Illinois Governor Pat Quinn awarded Northstar a 10-year contract to manage the Illinois Lottery in the fall of 2010.

"We look forward to continuing to work closely with the new team at Northstar to continue the creative marketing and brand-transformation efforts over the past six to eight months that broadened the Lottery's player base and generated new sales and profits," added Jones.

Northstar is a consortium comprised of lottery industry vendors Gtech and Scientific Games. According to state Lottery officials, Northstar was paid a total of $85.1 million in management fees for FY12.

Northstar took issue with the state's demands. "The state has not shared with us its final audit, so we believe it is unfair of them to take this position," said Avis LaVelle, Northstar's vice president of corporate affairs.

Northstar Lottery Group manages the Illinois Lottery under a 10-year contract it signed in 2011. Northstar is a consortium that includes GTECH Corp., which is itself owned by Lottomatica Group and Scientific Games Corp.

Chicago Business Journal

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11 comments. Last comment 4 years ago by jamella724.
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sully16's avatar - sharan
Ringleader
Michigan
United States
Member #81740
October 28, 2009
40561 Posts
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Posted: March 19, 2013, 6:24 pm - IP Logged

Sounds like it may end up in court.

Did you exchange a walk on part in the war ?

For a lead role in a cage?

 

                                            From Pink Floyd's " Wish you were here"

    rdgrnr's avatar - walt
    Way back up in them dadgum hills, son!
    United States
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    April 28, 2009
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    Posted: March 19, 2013, 8:02 pm - IP Logged

    Everything the Illinois government touches turns to you-know-what without fail.

    When the head nods in Chicago, the tail wags in Springfield.

      Avatar

      United States
      Member #106133
      February 13, 2011
      17 Posts
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      Posted: March 19, 2013, 9:02 pm - IP Logged

      "Noted Illinois Lottery Superintendent Michael Jones: "Northstar won the private manager contract by projecting a net income of $851.2 million in FY12, but failed to reach this goal, consequently triggering a $20 million net income shortfall to the state. Northstar missed their initial net income commitment by $94 million. Our agreement requires Northstar to be held accountable for this shortfall."

      Yea, shame on the state for not letting a business shortchange them for $20 Million on agreement they made beforehand. Geez, some people find anything to complain about.  How miserable.

        markaz's avatar - Pandaavatar
        New Member
        Peoria,AZ
        United States
        Member #98399
        October 6, 2010
        11 Posts
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        Posted: March 19, 2013, 9:16 pm - IP Logged

        "Noted Illinois Lottery Superintendent Michael Jones: "Northstar won the private manager contract by projecting a net income of $851.2 million in FY12, but failed to reach this goal, consequently triggering a $20 million net income shortfall to the state. Northstar missed their initial net income commitment by $94 million. Our agreement requires Northstar to be held accountable for this shortfall."

        Nowhere do I see the word "guaranteed". Shame on you Northstar if it's in the contract.

        I'll bet the idiots in the Illinois Senate can't come within 5-10% of their "projected" annual budget. If not, SUE the state all you Illinois residents.

        Desperate people do desperate things.

          noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
          Bay Area - California
          United States
          Member #136477
          December 12, 2012
          4108 Posts
          Offline
          Posted: March 19, 2013, 10:54 pm - IP Logged

          "Noted Illinois Lottery Superintendent Michael Jones: "Northstar won the private manager contract by projecting a net income of $851.2 million in FY12, but failed to reach this goal, consequently triggering a $20 million net income shortfall to the state. Northstar missed their initial net income commitment by $94 million. Our agreement requires Northstar to be held accountable for this shortfall."

          Nowhere do I see the word "guaranteed". Shame on you Northstar if it's in the contract.

          I'll bet the idiots in the Illinois Senate can't come within 5-10% of their "projected" annual budget. If not, SUE the state all you Illinois residents.

          The Illinois lottery is doing what the Water Board out here in the Bay Area- California has done. The water rates have doubled- when asked why, their response was we " projected" an upturn in the local housing industry with water flowing to new houses and when that did not come to fruition,  we have to pass those projected costs onto the consumer.
          Same thing here.However Northstar did sign on the dotted line, they on the hook.

            Coin Toss's avatar - shape barbed.jpg
            Zeta Reticuli Star System
            United States
            Member #30470
            January 17, 2006
            10353 Posts
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            Posted: March 20, 2013, 12:16 am - IP Logged

            Every state considering selling its lottery to a private firm needs to think about situations like this.

            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.

              HaveABall's avatar - rocket

              United States
              Member #72448
              March 18, 2009
              1228 Posts
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              Posted: March 20, 2013, 12:18 am - IP Logged
              From Wikipedia, the free encyclopedia: "Lottomatica S.p.A. is an Italian company active in the gaming business. The world's largest operator of lotteries[2] (its portfolio includes Italy's Lotto game), Lottomatica also provides various other gaming services and related technologies. The company has its offices in Rome. In August 2006, it completed the acquisition of Gtech, a U.S. gaming company. It is controlled with a 59.8% stake by the De Agostini group."
              Hum, the 100% U.S.A. headquartered companies, who were honest by showing lower earnings potential, were passed over by Governor Quinn's advisers.  Therefore, Quinn and his administration aren't a supporter to 90%+ Illinois, or even U. S. of A., owned companies!  Quinn's administration should quickly end this unpatriotic (with 1/2 U.S.A. owned conglomerate) 10 year contract!  [Same for national, high populace % played, Powerball and Megamillions lottery games if same, unpatriotic, HIGH management by foreigner company.]
              Dupe Alert No No

              Having several millions of dollars in my financial accounts means receiving several valuable services each day!

              Disney

                rdgrnr's avatar - walt
                Way back up in them dadgum hills, son!
                United States
                Member #73904
                April 28, 2009
                14903 Posts
                Offline
                Posted: March 20, 2013, 1:09 am - IP Logged

                "Noted Illinois Lottery Superintendent Michael Jones: "Northstar won the private manager contract by projecting a net income of $851.2 million in FY12, but failed to reach this goal, consequently triggering a $20 million net income shortfall to the state. Northstar missed their initial net income commitment by $94 million. Our agreement requires Northstar to be held accountable for this shortfall."

                Yea, shame on the state for not letting a business shortchange them for $20 Million on agreement they made beforehand. Geez, some people find anything to complain about.  How miserable.

                Yeah, just keep your mouth shut and go along with the program, right?

                That's why Illinois has so many crooks in state government and in jail.

                And why they're on the verge of collapse.

                Cuz hand-wringing nervous-nellies are too afraid to stand up to 'em.

                Too scared to say anything.

                Pffffffffffffttttttttt!

                  sully16's avatar - sharan
                  Ringleader
                  Michigan
                  United States
                  Member #81740
                  October 28, 2009
                  40561 Posts
                  Offline
                  Posted: March 20, 2013, 10:54 am - IP Logged

                  Every state considering selling its lottery to a private firm needs to think about situations like this.

                  Yep, could turn into a 3 ring circus in no time.

                  Did you exchange a walk on part in the war ?

                  For a lead role in a cage?

                   

                                                              From Pink Floyd's " Wish you were here"

                    dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
                    Oklahoma
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                    November 12, 2009
                    6290 Posts
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                    Posted: March 20, 2013, 11:51 am - IP Logged

                    Every state considering selling its lottery to a private firm needs to think about situations like this.

                    I Agree!

                    I Love Pink & Green 1908

                      Avatar
                      Texas
                      United States
                      Member #132455
                      September 4, 2012
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                      Posted: April 9, 2013, 5:03 am - IP Logged

                      It is quite hard if they guarantee the state with their projected income then fail to reach the said projected income. I hope they can settle things or else it will end up in court.