Representative Governor Bruce Rauner announced at a press conference taking place in Chicago that the state of Illinois will be seeking a new private manager to handle the state’s lottery system. The proposal would be a contract worth $300 million that would pay out to another management company that would be solely responsible for various components of the state lottery.
Last year in early September, Rauner had reported that the state reached a termination agreement with the former management company, which was the first private firm in the United States to ever manage a state’s lottery system. Previously held by Northstar Lottery Group, this agreement will effectively remove them from the position and relieve the company of their obligation to manage the state’s lottery. This agreement will go into place on January 1st, 2017, or at a later date if it takes longer for the state to find a replacement to overtake the management position. The new contract being introduced would make the position more widely available to a larger number of private firms.
Rauner’s administration has released a report that stated that terminating the current management company’s contract has already saved the taxpayers an estimated $22 million, and has relieved a huge burden from the budget. The new contract that is being offered up would give a bit more freedom and allow for them to choose their own suppliers. The previous agreement that had been made between Governor Pat Quinn and Northstar back in 2010 required that the management company be forced to use both GTECH and Scientific Games as their supplier’s, which were both parent companies behind Northstar’s brand. This settlement was blocked out by Illinois Attorney General Lisa Madigan. Under the new contract, the upcoming management company would have their licensing fees paid up front, and the company would not be permitted to serve as the manager and supplier of the lottery system. As a result of their former termination, Northstar is also prohibited from participating in the bid for the contract.
When Northstar had first begun to run the state lottery system they had made a lot of promises, which included providing a significant boost to the revenue that was being earned through it. They failed to uphold their promises, and quite the opposite has been true – a lack of sales has resulted in quite a sad amount of revenue for the state. This played a big part in Governor Quinn’s decision to fire the company, which was made back in 2014 when the new management company failed to produce sufficient results.
During the Chicago news conference that recently took place last week, Rauner was quoted as saying, “ Our Illinois Lottery has been very poorly run and failed to meet expectations for years.” This was reported by the local news agency, which also goes on to state that it has taken about a year before the search for a new management company could begin due to the difficult nature of the new contract.