Alleging mismanagement and broken promises, Northstar Lottery Group has been given the boot.
The state of Illinois has fired the private company that was managing its state lottery and lost $125 million for the state last year.
Northstar Lottery Group had its contract terminated, and a new private manager will take over operations of the lottery by Jan. 1 2017 after a legislative report earlier this month determined that the Lottery actually lost money for the first time since 2009, according to an Associated Press report.
The amount of money generated for state programming was reduced by $125 million last year, leading to the move, which will immediately save taxpayers $22 million by not having to pay it to Northstar in an exit deal.
The new private manager will be able to select its own suppliers, which is different under Gov. Bruce Rauner compared to the former Gov. Pat Quinn’s administration. Under that deal, Northstar would have received the funds as an exit deal, and the state of Illinois would have had to give option rights to Northstar’s parent companies Scientific Games and GTech.
Lottery acting director B.R. Lane argued that the new agreement would save taxpayers hundreds of millions of dollars, according to the report.
Northstar had been hired back in 2010 to increase the profits of the Illinois Lottery, but it had been criticized over that period for how it managed the lottery.
A legislative report was commissioned, and it eventually portrayed the state’s relationship with Northstar in a negative light. The company failed to meet profit targets and had paid penalties, as well as expand at the rate it had promised, according to the report.
The state’s budget crisis has kept the Illinois lottery from paying out winnings of more than $25,000, resulting in a lawsuit from winners demanding that lottery tickets stop being sold until they are paid.