In a last ditch attempt at privatization, Illinois has opened the bidding process for private firms to manage its lottery business – which is considered to be the state’s bread and butter in funding schools and for road and bridge repair and construction.
The Chicago Tribune reported that Gov. Bruce Rauner is looking for a new firm that will handle the state lottery, which had recently become a national embarrassment because it lacked the statutory authority to pay big winners.
Northstar Lottery Services, which bagged the award to manage day-to-day operations of the lottery in exchange for a small cut of the profit, is set to exit on January 1, 2017 as a result of legal impasse over the state’s lottery policies that had greatly affected its revenues.
“Our Illinois Lottery has been very poorly run and has failed to meet expectations for years,” Rauner said, hoping that a deal can be reached with a private company on or before January 2017.
Rauner lamented how the state struggled to capitalize on the online lottery ticket sales despite being the pioneer of it in the United States.
Northstar, which was formed by two longtime lottery vendors, was picked by Illinois to manage the state lottery in 2010 for 10 years after it made the biggest promises of profits. However, the firm failed to meet their profit targets allegedly due to ridiculous state policies.
Learning from the mistakes of the previous administration, Rauner said the government is now closely studying all the things needed to better structure the deal for the second time.
Among the possible conditions to be set by the state includes allowing smaller firms to compete for the management job while prohibiting vendors who do the grunt work from also bidding on the management job.
Should they fail to find a firm, the governor floated the idea of forming a quasi-government agency to run the lottery — something that would have to be approved by the legislature.
