New Jersey lottery privatisation under fire

Pennsylvania governor Tom Corbett is not the only state governor having problems with state lottery privatisation plans; this week New Jersey’s Chris Christie will be wrestling with a claim by six members of Congress who have asked federal Attorney General Eric Holder to scrutinise a contract New Jersey declared last week.

Christie announced last week that the 15 year privatisation contract for the $2.7 billion New Jersey state lottery will be given to a joint venture titled Northstar New Jersey.

The request for the federal AG’s intervention comes during the 10-day waiting period before the contract to operate the state lottery can be finalised, reports New Jersey.com.

The Democratic Party politicians involved have reservations about the $120 million upfront payment for the contract, claiming that it could be in violation of a 2008 US Department of Justice opinion.

Northstar had earlier undertaken to pay the amount upfront, and predicted that it would increase lottery profits by almost $1.5 billion over the 15 year contract life.

Referencing the DoJ opinion, the dissenting politicians claimed in a letter to AG Holder:

“This opinion explicitly stated that, in order to prevent corruption or the appearance of corruption, a state should not receive any upfront payment from a private lottery manager.”

New Jersey Treasury spokesman Bill Quinn appeared unfazed by the attempt to derail the project, saying that the contract had been extensively reviewed by the New Jersey AG and other legal specialists, and that it had complied with all legal requirements.

The six dissenters are Bill Pascrell, D-Paterson; Rob Andrews, D-Camden; Rush Holt, D-Mercer; Frank Pallone, D-Monmouth; Albio Sires, D-Hudson; and Donald Payne, D-Essex.

Senate Majority Leader Loretta Weinberg, also a Democrat, asked the governor to put the lottery contract on hold, if necessary beyond the 10 day waiting period, until the federal AGs opinion has been obtained.

Related and similar