Wednesday, February 10, 2016

Dems symbolically block Christie's lottery privatization

The lottery privatization train is on its way into Trenton. Any day now, the gov is expected to sign a deal with a private operator to run the sales and marketing of the $2.8 billion state institution.

Dems symbolically block Christie's lottery privatization

Gov. Christie hosted a town hall meeting in Paterson last week. (AP Photo/The Record of Bergen County, Tyson Trish) AP

The lottery privatization train is on its way into Trenton. Any day now, the gov is expected to sign a deal with a private operator to run the sales and marketing of the $2.8 billion state institution. 

In Pennsylvania, Republican Gov. Corbett had to send his plan to a Democratic Attorney General for approval. In New Jersey, the attorney general is Christie's former chief counsel -- and the Democratic legislature has no power to stop Christie's plan.

So yesterday legislators did something largely symbolic: They passed a bill demanding that the Legislature sign off on any privatization deal. The move is futile, because Christie could announce the deal tomorrow and summarily veto the bill. There is just one bidder for the lottery, and negotiations with Christie's people are ongoing behind closed doors. I've reported the details that we know here.

Since Christie officials have refused to testify on the issue, Democrats saw this bill as their only recourse. 

The union that represents employees who may get laid off say the privatization would cost the state 7,000 total jobs -- that includes operators of small stores who rely on lotto sales. The private lottery company is expected to shift its sales focus to large chain stores.

Sen. Barbara Buono (D., Middlesex), Christie's expected opponent in the fall election, co-sponsored the bill. She said this in a statement: “The New Jersey Lottery is one of the most successful and most profitable lotteries in the country, generating close to one billion dollars a year for public schools and institutions throughout the state. The administration shouldn’t be rushing to turn it over to a private company. The private sector may see the Lottery as a cash cow, but privatization could be a costly risk for the state.”

Interestingly, the lone consortium of entities bidding on the New Jersey lottery, Northstar, was fined this week by the other state where it operates a lottery, Illinois. Although Northstar increased revenue in its first year, it fell nearly $100 million short of projections, according to published reports. It now owes the state $20 million. According to its bid for the job in New Jersey, the financial arrangement with the Christie administration would be similar to the one it has in Illinois.

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