Northstar New Jersey will supply marketing and sales services to New Jersey Lottery for 15 years
Despite months of protest from union leaders and Democrat legislators, the new Northstar New Jersey Lottery Group joint venture has signed a 15-year contract to supply the New Jersey Lottery with marketing and sales services.
A joint venture between American lottery technology provider Scientific Games Corporation and GTECH Corporation in partnership with OSI LTT NJ Holdings Incorporated, Northstar New Jersey has paid the eastern state $120 million up front as part of the agreement, which is set to begin from October 1.
According to a report from The Star-Ledger newspaper, the New Jersey Lottery is the state’s fourth largest source of revenues, generating $2.7 billion in ticket sales a year, and contributed $950 million in 2012 for university scholarships and programmes for the disabled and military veterans.
Under the deal, Northstar has pledged to generate a minimum of $1.42 billion in annual revenues over the 15 years in exchange for five percent of any increases while the state may cancel the arrangement if sales remain stagnant for two consecutive years.
“The business relationship we are launching with Northstar New Jersey will ensure that the New Jersey Lottery remains a vigorous and successful competitor in the fast-changing global gaming marketplace and that it continues to generate reliable and growing revenues for state institutions and educational programmes far into the future,” said Andrew Sidamon-Eristoff, Treasurer for New Jersey.
The deal sees New Jersey become the third state after Illinois and Indiana to privatise lottery operations with the New Jersey Superior Court preparing to hear an appeal on the agreement from the Communication Workers of America public employees union.
“By combining the New Jersey Lottery’s and Northstar New Jersey’s expertise and resources, we will be able to expand the New Jersey Lottery’s presence in the marketplace, offer exciting new games to our customers and new services to our retailers,” said Carole Hedinger, Executive Director for the New Jersey Lottery.