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Illinois fires lottery operator Northstar

Illinois LotteryIllinois Lottery: Illinois fires lottery operator Northstar
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Will continue to operate lottery for more than a year

The nation's first private company to manage a state lottery was fired Friday by the Illinois Governor after years of failing to make the lofty revenue targets it promised.

In a news release Friday, Gov. Bruce Rauner announced that his office had reached a termination agreement with Northstar Lottery Group that will remove the firm as private manager as of Jan. 1, 2017, or until a replacement is chosen.

The agreement also stipulated that Northstar's successor will have the freedom to choose its own suppliers, according to the release, which noted that an earlier termination agreement hammered out by then-Gov. Pat Quinn would have forced a new manager to use Northstar's parent companies, GTECH and Scientific Games. The Quinn settlement was blocked by Illinois Attorney General Lisa Madigan.

Friday's news release claimed the termination deal would save taxpayers $22 million and the state will begin a search for a new private manager right away. A spokeswoman for the governor's office could not be immediately reached.

The Rauner administration said the savings would come through an increase of $10 million in penalties Northstar will pay for falling short of its revenue goals, and a decrease in the fees the state must pay to the company for terminating the contract early.

Northstar was hired by Quinn in 2010 to run the lottery, promising to significantly boost revenues for the state agency, which had posted lackluster revenues compared to other large state lotteries.

But the company's tenure was tumultuous from the beginning, as it began requesting that its revenue targets be reduced because of a number of circumstances shortly after it took control of the day-to-day operations of the lottery in July 2011.

Over the next three years, the company fell nearly a half-billion dollars short of the amount it promised to bring to the state's coffers, according to a series of Tribune reviews of preliminary year-end financial figures. The shortfalls sparked growing criticism that led Quinn to announce his decision last fall to fire the company.

Last month, the lottery garnered national headlines after it began telling players who won prizes greater than $25,000 that they would not be paid until state lawmakers are able to pass a budget. Under state law, prizes larger than $25,000 must be paid by the Illinois comptroller, who is not authorized to issue the checks without a green light from the legislature.

A pair of winners filed a federal lawsuit against the lottery, alleging the agency committed fraud by continuing to sell tickets for games that had potential prizes greater than what the lottery could pay without a state budget in place. The suit seeks to force the lottery to stop selling tickets for these larger games, and also demands that the winners be paid promptly.

A representative for Northstar could not be immediately reached for comment.

Chicago Tribune, Lottery Post Staff

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12 comments. Last comment 1 year ago by fast eddie.
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dr65's avatar - black panther.jpg
Pennsylvania
United States
Member #74096
May 2, 2009
22891 Posts
Offline
Posted: September 19, 2015, 11:15 am - IP Logged

Promises, promises.

Remember Camelot?

Bravo Illinois! Good move.

246 ~~ 485 ~~ 369 ~~ 890 ~~ 705 ~~ 357 ~~ 129 ~~ 165 ~  007 ~ 225 ~ 818 ~ 440 ~  7775 5557

    Romancandle's avatar - moon
    Upacreek
    United States
    Member #136306
    December 8, 2012
    428 Posts
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    Posted: September 19, 2015, 11:20 am - IP Logged

    Umm... that's interesting.  Didn't the previous Gov fire Northstar already?

    I think what most folks really wanted to know is when are you going to start paying out your prizes?

    -RC

      itpmguru's avatar - 42a4d4d8f2a4312fb8e253dd8f6ef251
      No Man's Land
      United States
      Member #164139
      February 19, 2015
      5461 Posts
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      Posted: September 19, 2015, 11:24 am - IP Logged

      Wonder what would happen if everyone in Illinois stopped paying their property taxes because they don't have the money?  Sorry, forgot that is only an option for Gov. Co. Inc. Wink

      I won't get mad......I won't get even and NCEL will pay my bills :-)  - ITP
      "He who is not courageous enough to take risks will accomplish nothing in life." - Muhammad Ali
                                           


        haymaker's avatar - Lottery-012.jpg
        Egg Harbor twp.south Jersey shore
        United States
        Member #112968
        June 29, 2011
        3854 Posts
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        Posted: September 19, 2015, 11:29 am - IP Logged

        YOU'RE FIRED !

        uhh...15 months from now,  ya know so you have time to work things out.

        Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

          CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
          TX
          United States
          Member #121193
          January 4, 2012
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          Posted: September 19, 2015, 2:36 pm - IP Logged

          While your getting rid of the lottery company......Illinois folks should do the exact same thing to their entire state legislature.

          Stay Positive, Believe and good things will come your way

            sully16's avatar - sharan
            Ringleader
            Michigan
            United States
            Member #81740
            October 28, 2009
            40402 Posts
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            Posted: September 19, 2015, 11:23 pm - IP Logged

            While your getting rid of the lottery company......Illinois folks should do the exact same thing to their entire state legislature.

            I Agree! Yes indeed.

            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"

              Avatar
              Simpsonville
              United States
              Member #163189
              January 22, 2015
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              Posted: September 20, 2015, 7:59 am - IP Logged

              I Agree! Yes indeed.

              So last night's Powerball drawing, someone in Illinois won $2 million on Powerball...what happens to tickets that may expire due to this snafu of the Illinois government?  They need to revamp their laws along with a new lottery provider.

                Avatar
                Maryland
                United States
                Member #162434
                January 2, 2015
                887 Posts
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                Posted: September 20, 2015, 9:35 am - IP Logged

                So last night's Powerball drawing, someone in Illinois won $2 million on Powerball...what happens to tickets that may expire due to this snafu of the Illinois government?  They need to revamp their laws along with a new lottery provider.

                Interesting point.  I don't think it would apply since the winners would just need to go to the lottery and 'sign/acknowledge' that they have the ticket, I would think that stops the clock.  But what will MM & Powerball do if its not paid out in a year??? Hummmmm. 

                  fast eddie's avatar - lasvegas2
                  Chicago,IL.
                  United States
                  Member #2902
                  November 29, 2003
                  1426 Posts
                  Offline
                  Posted: September 20, 2015, 9:55 am - IP Logged

                  change bring along with it changes, does the contractor decide if they use ping pong balls or RNG? I HOPE NOT. I don't want a stupid RNG here in IL. Confused

                  "Money won is twice as sweet as money earned"

                    Gleno's avatar - Lottery-001.jpg
                    New Jersey
                    United States
                    Member #80354
                    September 25, 2009
                    705 Posts
                    Offline
                    Posted: September 20, 2015, 7:20 pm - IP Logged

                    Scapegoating  a long and ancient technique but WOW Northstar gets $22 M!! 

                    What?

                    This still does not address the budget impasse that is giving winners over $25K an IOU!

                    Mad

                    Hope the voters in Il flood the Gov.'s office with phone calls, emails, and letters to get their budget passed,

                     Is this the State that kills the goose that lays the golden egg?

                    Could out of state residents help in this mess? Not that they would listen to "lottery Players" which they may perceive as second class citizens.

                     

                    Group Hug

                      Gleno's avatar - Lottery-001.jpg
                      New Jersey
                      United States
                      Member #80354
                      September 25, 2009
                      705 Posts
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                      Posted: September 20, 2015, 7:29 pm - IP Logged

                      Sully16 ,

                      How about the citizens  fire the Governor and Legislature for dereliction of duty ?

                      Lurking

                        fast eddie's avatar - lasvegas2
                        Chicago,IL.
                        United States
                        Member #2902
                        November 29, 2003
                        1426 Posts
                        Offline
                        Posted: September 30, 2015, 11:12 pm - IP Logged

                        change bring along with it changes, does the contractor decide if they use ping pong balls or RNG? I HOPE NOT. I don't want a stupid RNG here in IL. Confused

                        I  f-n knew it. they didn't even wait to make changes. Mad

                         

                        RNG makes me want to: Puke

                        "Money won is twice as sweet as money earned"