Northstar wins New Jersey lottery contract

Northstar Lottery Group has been named the contract winner to run the New Jersey state lottery and has a the target of generating US$1.18bn annually in net income during the first five years.

The deal will see Northstar, a consortium between GTECH and Scientific Games and the sole bidder for the contract, run ticket sales and marketing for the lottery until 30 June 2029, with the agreement set to be signed within 60 days.

The state has privatised its lottery with the aim of increasing its net income by an average $211m by the fifth year of operation.

The deal was described as a chance for the lottery to “realise its full potential” by Northstar New Jersey chairman and GTECH president and CEO Jaymin Patel.

“Northstar has developed a comprehensive business plan that extends the New Jersey Lottery’s trusted and successful brand and forward-thinking leadership. We will develop new and effective ways to increase the Lottery’s income and value to the State,” Patel said.

The privatisation deal was agreed despite opposition from the New Jersey Senate, which passed a bill last month allowing the legislature the right to veto such a contract. The legislation was sent to Governor Chris Christie to sign into law, something he was always unlikely to do as it would have restricted his power.

The deadline was 27 December for bids to run a lottery which produced $930m for New Jersey in 2011, the fourth-largest revenue source for the state. Although it was initially suggested that the contract-winner would be permitted to online gambling games, this is now unlikely after Christie legalised egaming run only by the 12 Atlantic City casinos in February.