Friday, February 12, 2016

Christie deal gives NJ lottery to Italy gambling billionaire, Perelman

Gtech, Scientific Games get preliminary nod

Christie deal gives NJ lottery to Italy gambling billionaire, Perelman

Ron Perelman

New Jersey Gov. Chris Christie's planned private outsourcing of the state-run New Jersey lottery - see my colleague Matt Katz's story here -- would benefit two big gambling companies controlled by out-of-state billionaires.

Christie's pick for the job, the Northstar lottery group, which already runs the struggling Illinois state lottery, includes:

- Gtech Holdings, based in Providence, Rhode Island, and owned by Lottomatica Group S.p.A., which runs the Italian national lottery and is majority-controlled by Italian billionaire Marco Drago's De Agostini S.p.A. investment group, with a 53% stake, worth more than $2 billion;

- Scientific Games Corp., New York, a publicly-traded company whose major owner is Ronald Owen Perelman, the New York-based, Elkins Park-raised (corrected) billionaire owner of MacAndrews & Forbes, Revlon and many other companies. Perelman owns a 38% stake worth around $300 million.

The Gtech-Scientific Games partnership pledged $120 million as a cash reserve, to guarantee state income against a shortfall (which happened to Northstar in Illinois), to win Gov. Christie's support.

Ironically, Gtech cited Pennsylvania's $200 million deposit requirement as a reason for dropping out of bidding to run Pennsylvania's lottery.

Pa. Gov. Gov. Tom Corbett's aides chose the only remaining bidder, U.K.-based Camelot Global Services, to privatize the Pennsylvania Lottery after Camelot's owner, the Ontario (Canada) Teachers Pension Program, agreed to commit $150 million and lend another $50 million.

Scientific Games provides ticketing services to the Pa. lottery, among its other clients.

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PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

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