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.

* File this under "Stuff I didn't know"
* Question of the day
* From the mouths of babes
* You don't need a weatherman to know which way the wind blows
* Unclear on the concept
* *** LIVE COVERAGE *** Gov. Rauner press conference
* Zopp whacked as she prepares to air TV ads
* *** UPDATED x1 - Not exactly limo levels *** Should voter registration be easier or tougher?
* Rate the Alvarez kick-off video
* Face facts and stop playing the victim
* Joe Tybor
* Poll: Majority of Southern Illinois voters disapprove of Rauner
* 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

* OnePlus Mini makes brief early appearance on Amazon India
* Huawei Honor 7i renamed as ShotX in Europe, up for pre-order in Germany
* Two New Apps Tackle The Problem Of Running Out Of Space On Your Phone
* Android Wear-powered ELE Watch sighted on Chinese online store
* Save 97 percent on the Big Mac Bundle + learn to build iOS9 apps for just $19
* TD Canada Trust Lends Credence to Apple Pay Launch in Canada Next Month
* Sony releases AOSP Marshmallow binaries for open devices, adds Xperia Z5

* The 10 best White Sox games of 2015
* Curtain rises on prospect-packed Fall League
* Podcast: Pitchers and Catchers review
* Chase Utley's takeout "slide" could be the tipping point
* First White Sox bench coach candidate emerges
* Hahn feels White Sox fanbase's frustration
* Sox to rely on improvement of core in 2016


Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

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


* Illinois governor will sell government building.....
* UPDATE 1-Illinois governor eyes sale of landmar.....
* Thompson Center architect says facility should .....
* Rauner wants to sell downtown Chicago state off.....
* Rauner wants to sell downtown Thompson Center -.....
* Busting the Myths About the Illinois Budget Imp.....
* Rauner wants to sell downtown Chicago state off.....
* Rauner Planning To Sell Thompson Center - Progr.....
* Rauner wants to sell Chicago's Thompson Center .....
* Rauner moves to auction the James R. Thompson C.....

* Thompson Center architect says facility should be repurposed
* Rauner wants to sell downtown Chicago state office building
* School won't comply with order regarding transgender student
* McHenry teachers union approves contract to end strike
* EXCHANGE: Churches work together to preserve historic home
* Public can see Stanley Cup in Millennium Park on Wednesday
* Coalition urges Illinois communities to plant oak trees
* Automatic Illinois voter registration expected in committee
* $5M grant to ISU will aid young people in Champaign County
* Former reporter and Illinois Supreme Court spokesman dies

* Rauner wants to sell state's Thompson Center in downtown Chicago
* Newest state senator backs Rauner's Turnaround Agenda
* Judge: Class-action status allowed in deaf inmates' lawsuit
* WSEC-TV's CapitolView: The continuing state budget impasse
* NightReach program's impact hampered by state budget impasse
* FOIA issue of emails on private devices goes back to court
* State criticized for approach to problem gambling
* For Illinois players, $1.6 billion in losses in three years
* More than 400 press passes issued for this year's Illinois State Fair
* Rauner names new chair of Illinois Historic Preservation Agency board

* AB InBev may have to give up the world's best-selling beer to seal SABMiller deal
* Why Playboy needs Facebook more than it needs porn
* Playboy needs Facebook more than it needs porn
* Feds order rare probe into soaring downstate electricity prices
* Big 3 airlines flexing their political muscle in Washington

* Blackhawks fans get emotional over picture of Patrick Sharp, Johnny Oduya with Stanley Cup rings
* Blackhawks fourth-liners embrace shutdown role
* Claypool outlines steps to prevent another Byrd-Bennett scandal
* Thompson Center to go up for sale: report
* Clinton slams Trump in front of his Vegas casino
* Byrd-Bennett back in spotlight Tuesday — for expected guilty plea
* Byrd-Bennett pleads guilty to fraud
* Cubs offer aldermen playoff tickets at face value
* Long road takes Ryan Garbutt to the ultimate hockey destination
* Brown: Time running out to fix Council inspector general mess

* Live blog: Cubs try to take series from Cardinals
* Derrick Rose 'most likely' won't play in preseason, opener in jeopardy
* Police: Attempted sexual assault reported in Lincoln Park
* Man charged in '85 murder of teenage girl pleads not guilty
* Website features 3-D views of shipwrecks along Indiana shoreline
* Rauner looks to sell Thompson Center; architect Helmut Jahn rips state's care
* Pittsburgh investigating officer's slam takedown of Cubs fan
* Supreme Court decision on Highland Park's gun law on hold
* Counterfeit Cubs tickets burn some fans
* Police: Suspects crash car after shooting 2 men in Bronzeville

* Rauner wants to sell state's Thompson Center in downtown Chicago
* Newest state senator backs Rauner's Turnaround Agenda
* Judge: Class-action status allowed in deaf inmates' lawsuit
* Kathleen Parker: Don't do it, Paul Ryan
* WSEC-TV's CapitolView: The continuing state budget impasse
* NightReach program's impact hampered by state budget impasse
* FOIA issue of emails on private devices goes back to court
* Scott Gauvin: Citizens need more say in CWLP's future
* State criticized for approach to problem gambling
* For Illinois players, $1.6 billion in losses in three years

* 10-13-15 News-Gazette Prep Sports Podcast
* Illinois Women's Barketball 2015-16
* Illinois Women's Basketball 2015-16
* Street closures listing
* Oct. 16 Illinois football chat
* Oct. 15 prep sports chat
* Oct. 14 Illinois basketball chat
* Parkland grad behind home plate for Cards-Cubs
* A wetter pattern to unfold
* New target date for Papa Del's: January

* Liability switch could leave merchants holding the card
* Get latest news, analysis with Chicago Cubs newsletters
* Top beer makers to join forces to face industry challenges
* Suge Knight, Katt Williams, ordered to trial in robbery case
* Penn State looking forward to rare showdown with No. 1 team

* 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

* Al Franken Pushing to Make College Textboo......
* State senators propose law to reduce textb......

* Suburban Republican says he'll challenge M......
* Illinois U.S. Senate Primary Adds New Name......

* Environmentalists Take Aim At Morgan Stanley Over Coal Industry Financing
* Poll: Rauner's Disapproval Rating At 50 Percent Among Southern Illinois Voters
* Schakowsky Introduces Bill To Make Renewable Energy Tax Credit Permanent
* Rauner Planning To Sell Thompson Center
* Rauner suggests selling Chicago's Thompson building
* UPDATE x1: Rauner suggests selling Chicago's Thompson building
* Kinzinger blasts House conservatives and think tanks
* Twitter or Bingo during Tuesday night's Democrat prez debate
* No Illinois GOP members part of powerful conservative House Freedom Caucus
* FBI: Former Chicago Public School CEO pleads guilty of kickback scheme

* Illinois Lottery Seeks Industry Feedback in Search for New Manager - Posts Request for Information in initial search for new private partner
* Board’s New Rules Will Reduce Risk of Tire Fires and Disease-Carrying Mosquitos
* Illinois Hosts Inaugural Interstate Medical Licensure Compact - Aims to increase health care access through multi-state physician licensure program
* IEMA Announces Elgin Community College Attains ‘Ready to Respond Campus’ Designation - Elgin one of five Illinois campuses to receive distinction
* New Mortgage Loan Interface Increases Efficiency, Compliance

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