SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
Fun with numbers

Wednesday, Jun 4, 2014

* AP

Illinois Senate President John Cullerton says he’s “extremely disappointed” with the private company that runs the state lottery.

Cullerton says lawmakers believed a private firm would operate the lottery better than the state. He says financial reports indicate Northstar Lottery Group “is unable to live up to its commitments.”

Reports filed with the Lottery Control Board show Northstar is projected to be $716 million short of its $3.5 billion required sales target this fiscal year. The company must make “shortfall payments” to the state when it misses targets.

* But this is also a state failure. Scroll way down in this Tribune story and you’ll see this

The firm became the nation’s first private manager of a state lottery in 2010. The selection process itself was not without controversy, prompting a scathing report from the state auditor general, which highlighted some irregularities and questionable practices. In one instance, a member of the evaluation team chosen by the governor to review and recommend a winner reportedly read nearly 2,000 pages of bid proposals in a single day. […]

Shortly after the company took over the lottery in July 2011, it began requesting that the state lower the net revenue promises set forth in the contract.

And scroll even further and you’ll see this

In an appearance last month before the Lottery Control Board, Northstar CEO Timothy Simonson defended the company’s performance. He said the lottery has brought in an additional $450 million to fund education and capital improvements and such charitable causes as breast cancer research and veteran support programs.

The increase shows the firm has grown sales at a rate of 12 percent annually, compared with the 3 percent growth the lottery experienced under state control, Simonson said.

By the state’s own estimate, it would have taken a decade to reach the net revenue figures that Northstar achieved in the first year after taking over day-to-day operations of the lottery, he said.

This bid was goofy from the start. Northstar obviously over-promised and a cash-starved state fell for it hook, line and sinker. Northstar should be punished for its behavior, but spare me the outrage because there’s also no doubt whatsoever that moving to a private manager has considerably increased state revenues.

- Posted by Rich Miller        

  1. - Walker - Wednesday, Jun 4, 14 @ 10:58 am:

    A private company over-promises, under-delivers — but still does better than what would have happened without their efforts.

    Everyone points fingers.

    Just like state government.

  2. - Langhorne - Wednesday, Jun 4, 14 @ 11:06 am:

    As my dad taught me at arlington park, “bettin’ on em dont make em win.” Just bec you really really want or need a particular outcome, doesnt make that a reality. Northstar over promised and the state bought it.

  3. - VanillaMan - Wednesday, Jun 4, 14 @ 11:08 am:


    OK - now John, pretend or act, (you can do this!), that you are an Illinois taxpayer. Use that same emotion you are displaying towards Northstar, but instead of Northstar, substitute Illinois State Government.

    Show the scowl! We want to see that face of utter disappointment! YOU ARE A TAXPAYER!

    Take Two!

  4. - Anon. - Wednesday, Jun 4, 14 @ 11:12 am:

    ==Northstar should be punished for its behavior, but spare me the outrage because there’s also no doubt whatsoever that moving to a private manager has considerably increased state revenues.==

    That is sort of like saying that there shouldn’t be outrage when a contractor builds a 2-lane bridge when the contract was for 6 lanes, because there wouldn’t be any bridge if the contractor hadn’t done the work. Anyway, if you look on the shortfall payments as being equivalent failing to qualify for a bonus for performance over and above an acceptable level, rather than as a punishment for not delivering at all, you get the same result without resorting to outrage. We can save the outrage for giving them the bonus even if they don’t earn it.

  5. - Decatur Dan - Wednesday, Jun 4, 14 @ 11:23 am:

    There should be more outrage and certainly is a lot of doubt…

    No one can say how well the State would have done without Northstar. Media reports have indicated that most other lottery States have done better than Norhtstar.

  6. - Mittuns - Wednesday, Jun 4, 14 @ 11:24 am:

    Surprised the sky has not fallen yet in the world of our resident Gloomy Gus.

  7. - MrJM (@MisterJayEm) - Wednesday, Jun 4, 14 @ 11:41 am:

    So the state entered into a project with a company who’s business model is fleecing math-challenged chumps… and then what happened?

    – MrJM

  8. - The Prince - Wednesday, Jun 4, 14 @ 11:56 am:

    Somewhat OT on a big WGN day: WGN may lose Illinois State Lottery drawings as well.

  9. - Mokenavince - Wednesday, Jun 4, 14 @ 12:15 pm:

    Cullerton just can’t realize you can’t squeeze blood out of a turnip. Oh I forgot he is a lawyer.

  10. - John Culpepper - Wednesday, Jun 4, 14 @ 12:22 pm:

    I like the observation Mokenavince makes. Funny!

  11. - Anonymous - Wednesday, Jun 4, 14 @ 12:42 pm:

    ==Somewhat OT on a big WGN day: WGN may lose Illinois State Lottery drawings as well.==

    People still watch that?

  12. - The Prince - Wednesday, Jun 4, 14 @ 12:52 pm:

    Just for Linda Kollmeyer.

  13. - Oneman - Wednesday, Jun 4, 14 @ 12:58 pm:

    Also surprised they didn’t negotiate something that reduced their targets if the state implemented expanded gaming… Like video poker.

  14. - DuPage - Wednesday, Jun 4, 14 @ 1:09 pm:

    Typical results when things are privatized. They will inflate the savings to get the contract. They don’t guarantee the results, and the state would have a hard time replacing them. A lot of former state employees who used to run it have left and are working for other state’s lotteries.
    Northstar won’t be going anywhere, they have the state by the short hairs.

  15. - Dirty Red - Wednesday, Jun 4, 14 @ 5:18 pm:

    I was at a meeting that discussed this very issue a couple years ago. NorthStar has yet to hit ANY of their annual projections. As a result they have paid the penalty every year of that contract. Is it at all possible this was a case of some horribly flawed projections? The group I was with was under that impression.

  16. - Tarden - Wednesday, Jun 4, 14 @ 5:28 pm:

    Doesn’t Northstar have to make up any shortfall
    in their projections? I believe they did last year.
    I assume that means they’ll do it again. How is the State harmed? Anyway you look at it seems they’ve made more $ than the state run system….

  17. - steve schnorf - Wednesday, Jun 4, 14 @ 6:47 pm:

    the big gripe I have is that they significantly overpromised, apparently at least partially in order to win the contract, which means there is some other company out there who didn’t overpromise, who then perhaps should have won the bid, and might be bringing in even more today. Unfortunately, do I recall that the other bid- der(s) were disqualified?

  18. - Oneman - Wednesday, Jun 4, 14 @ 8:30 pm:

    Doesn’t Northstar have to make up any shortfall

    Think they have to pay a penalty, not make up the entire shortfall.

  19. - A guy... - Thursday, Jun 5, 14 @ 10:04 am:

    Just out of principle the Lottery should be run privately. The problem with this or any other gambling scheme is that it’s only marketable and capable of growing when the numbers get into new astronomical levels. The people who play, play. The ones who don’t, don’t. Except to buy a ticket or two when it’s the topic of the day or week. They’ve expanded to so many games, that strategy is less effective now. Video poker is available to the same demo. Not much there to work with anymore.

  20. - Mouthy - Thursday, Jun 5, 14 @ 1:42 pm:

    What they are saying is that we are making more while taking in less in sales. How do you do that? By sticking it to the lottery ticket buyer even more. I used to buy a couple of tickets a week but don’t any longer. When the odds are 1 in almost the population of the U.S then it gets a little silly…

  21. - Commonsense in Illinois - Thursday, Jun 5, 14 @ 4:14 pm:

    When the bids came in in 2010 did no one say…jeepers these are awfully fantastic numbers you’re promising here…but it is 2010, and there is an election, and…well what the heck, the public will buy this…hell they bought Blagojevich - TWICE!

  22. - Jacob S - Thursday, Jun 5, 14 @ 8:22 pm:


Sorry, comments for this post are now closed.

* Caption contest!
* Crossing the line
* Moody's warns Illinois
* The Credit Union Difference
* *** UPDATED x1 - Franks responds *** Uh-oh
* Then and now
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Visit our advertisers...







Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

* Review: Mophie's Juice Pack Reserve & Power Reserve Offer Power in Small Packages
* Uber Chases The Perfect Ride With Back-To-Back Trips
* Google rumored to assist Samsung with TouchWiz optimization
* Google updates ramp up of AMP
* Bodle working on phone screen that uses less energy
* Google Accelerated Mobile Pages will start speeding up the mobile web early next year
* Black Friday mobile deals and the quest for Inbox Zero | Pocketnow Weekly 176

* White Sox sign catcher Avila to one-year deal
* Tommy Kahnle enters, Geovany Soto departs
* White Sox acquire Kahnle in deal with Rockies
* White Sox acquire RHP Tommy Kahnle from Rockies for RHP Yency Almonte
* White Sox acquire Kahnle in deal with Rockies
* KBO's Jae-gyun Hwang can be posted after all
* White Sox Charities all about opportunities


Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0


* *** UPDATED x1 - Franks responds *** Uh-oh - Th.....
* Illinois Makes Tax-Break Deals with 3 Companies.....
* Rauner Says Homeland Security to Address Syrian.....
* Rep. Brady: Safety should be top concern in see.....
* Illinois makes tax-break deals with 3 companies.....
* Illinois makes tax-break deals with 3 companies.....

* Springfield police chief bemoans body-cam 'burden'
* EXCHANGE: Fire training buildings adapt to versatile needs
* Amtrak ramps up service, offers tips for holiday travel
* Bishop Hill Museum acquires early painting by folk artist
* State treasurer to hold online auction of unclaimed property
* Man gets 16 years for sexually assaulting a woman he knew
* U of Illinois group looking for chancellor led by professor
* Illinois makes tax-break deals with 3 companies
* Suburban Chicago teacher sentenced for child pornography
* N. Illinois University removes Bibles from campus hotel

* Springfield police chief sees problems with body cam law
* Lawsuit challenges Illinois ban on marijuana campaign money
* Number of Illinois inmates released on parole climbing
* Bryce Benton circulating petitions to challenge Sen. Sam McCann in GOP primary
* Executive Mansion roof repairs nearing completion
* Candidates begin filing petitions for March primary election
* Benton circulating petitions to challenge McCann in GOP primary
* Rauner administration says House Democrats holding local aid hostage
* Rauner says White House promises to answer refugee queries
* More honors for Auburn woman who saved man from train

* Review: Sociale in the South Loop
* Her Barbie was a lawyer. Now she defends victims' rights
* United offers pilots 13% raise
* Shire prepares to make new bid for Baxalta
* Illinois makes tax-break deals with 3 companies

* Reasons Blackhawks fans should be thankfull
* Mitchell: “Hideous” video tells an even more hideous story
* Marchers protest CPD handling of Laquan McDonald’s murder
* Mihalopoulos: Laquan McDonald video could define state’s attorney’s race
* Patrick Kane’s point streak nearing historic levels
* Uber cleared to serve O’Hare, Midway airports
* McCarthy: “Nonsense” to claim his firing of Dante Servin was politically timed
* Quickie quiz: Only player to score goal at United Center, Soldier Field and Wrigley Field?
* Black Caucus chairman: What took Alvarez so long to file charges?
* Veljko Paunovic announced as new Fire coach

* Home invasion charges for man sought in ex-girlfriend's disappearance
* Illinois treasurer to hold online auction of unclaimed property
* Aspiring poet and protest organizer among those arrested during Loop video protest
* 7 shot, 1 fatally, in shootings on the South Side
* Traffic halted, but few arrests, as hundreds march in Loop after video release
* Shooting video latest stain on Chicago's policing record
* A moment by moment account of what the Laquan McDonald video shows

* Michael Gerson: The Trump effect, still 'understated'
* Catherine Rampell: For millennials, first comes love — then what?
* Springfield police chief sees problems with body cam law
* Lawsuit challenges Illinois ban on marijuana campaign money
* Number of Illinois inmates released on parole climbing
* Lawsuit challenges Illinois ban on marijuana campaign money
* Kathleen Parker: Crazy is as crazy does
* Bryce Benton circulating petitions to challenge Sen. Sam McCann in GOP primary
* Executive Mansion roof repairs nearing completion
* Candidates begin filing petitions for March primary election

* 11-25-15 Dr. Tom Ramage, President of @ParklandCollege
* 11-25-15 Penny for Your Thoughts
* PODCAST: Groce previews UAB
* Mississippi River bridge at St. Louis to reopen next month
* Deere's profit tops forecasts even as its sales fall sharply
* Cheap gas fueling expanded Thanksgiving travel day
* Pope arrives in Kenya in pilgrimage to 3 African countries
* Some in military suspended for deadly Afghan hospital attack
* Chicago awaits more protests over police shooting
* Putin sends air-defense missiles to Syria to deter Turkey

* EPA nixes approval of new weed killer for engineered crops
* Trooper leaves hospital, teen charged in Philadelphia chase
* Growth _ but not expansion _ in US Internet gambling market
* Woodson, Rivers, Megatron among sportsmanship award nominees
* Fox Lake musician wins Bob Hope Award

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Nebraska ethanol producers name former Dur......
* Rauner Says Homeland Security to Address S......

* Kirk co-authors Government Transformation ......

* EXTRA: Who pays politically for death of McDonald at hands of cop?
* Poe's 99th District replacement moves to State House from Governor's office
* Jim Edgar is wrong about undocumented immigrants
* Registered.
* Free Malcolm London.
* Sunday posts, pics and tweets.
* “The Driver’s Side” – News From The Motorist’s Perspective
* Laquan McDonald Protesters Produce Traffic Chaos Tuesday Night
* 4635 Broadway Begins Its Renovation
* A violent overtone to this week of thanks; will it be ugly Black Friday?

* Emergency Management Officials, National Weather Service Encourage Winter Preparedness - November is Winter Weather Preparedness Month in Illinois
* Keep Your Family Safe This Winter - November through February are leading months for carbon monoxide related incidents
* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact

    Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller