Lottery revenues are down and on track to make it the third year out of four that the private company running the games has missed its targets.
The sales slump comes as Gov. Chris Christie — who pushed to privatize the state-run games of chance at a time of deep fiscal challenges — is turning again to the lottery to help solve a sticky fiscal problem. Christie now wants to redirect revenue from the lottery, which pays for social service programs, to the public employee pension fund. In New Jersey, the lottery provides a significant portion of state revenues, ranking behind only the income tax, sales tax and corporate taxes.
While details of Christie’s pension proposal are still being drafted, the lottery’s pattern of falling short under an outside company highlights the risks legislators openly worried about when Christie insisted on the privatization.
The group, Northstar New Jersey, had promised during the bidding process — when Christie’s revenue projections had fallen more than $400 million short — that giving it control of the lottery’s essential functions would return “at least” an extra $1.42 billion to the state over 15 years. As part of the contract, awarded in 2013, Northstar paid the state $120 million to support its budget.