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.
Sounds like it may end up in court.
Everything the Illinois government touches turns to you-know-what without fail.
When the head nods in Chicago, the tail wags in Springfield.
"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.
"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.
Every state considering selling its lottery to a private firm needs to think about situations like this.
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!
Yep, could turn into a 3 ring circus in no time.
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.