TRENTON, NJ — A state appeals court last week ruled against a public workers union in its effort to stop New Jersey from privatizing parts of the state lottery.
Despite months of objections from Democratic lawmakers and union leaders, the state announced last June that it signed a 15-year contract for a private company, Northstar New Jersey, to manage the sales and marketing branches of the lottery. Gov. Chris Christie's administration said the move will bring New Jersey a surge in revenue.
But the Communication Workers of America, which represents the state's lottery workers, took the matter to court. The union claimed the plan violated the state constitution and included a bid that was unlawfully approved by the state Treasury Department.
The three-judge panel ruled against both arguments last Wednesday.
The lottery is New Jersey's fourth-largest revenue source. It generates nearly $3 billion in annual ticket sales, and the state receives more than $900 million of it, helping finance scholarships and programs for military veterans and the disabled.
But state officials said the agreement with Northstar will bring even more money. The company paid the state $120 million up front and promised to bring New Jersey at least $1.42 billion in revenue over the next 15 years. Northstar would keep 5 percent of the increases if it meets its goals.
Officials stressed that the state would continue to maintain control and regulation over the lottery. Christie, a Republican, can also end the deal if the firm fails to increase revenue for two years.
But critics said they were bothered that Northstar was the only bidder for the contract and were worried that the deal would lead to job losses.
The CWA added that the state constitution says the lottery can be conducted by the state only and not by a private entity. The appeals court, however, ruled July 3 that it does not read the law that way.
The union also said the director of the Treasury Departments Division of Purchases and Property unlawfully approved Northstar's a $4.75 million annual management fee. But the court said the director "properly exercised her discretion."
A spokesman for the CWA did not immediately return a message seeking comment.