SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
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        


22 Comments
  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:

    CUT!

    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:

    Sad


Sorry, comments for this post are now closed.


* It's not all on Dunkin
* Caption contest!
* SUBSCRIBERS ONLY - Supplement to today’s edition
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Rauner react
* Organized labor's response
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............


Search This Blog...

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

Search the 98th General Assembly By Keyword

          
        * Next’s Clever New iOS Keyboard Has Almost Everything You Want
        * Samsung Sleepsense tracker coming to Korea
        * Five hours of web dev training for free [DEALS]
        * Griffin Expands Survivor Lineup With Two New iPhone 6 and 6 Plus Cases
        * CBS to stream selected NFL regular season and play-off games in lead up to Super Bowl
        * Qualcomm releases more info about upcoming Kyro architecture, Snapdragon 820
        * 10 things you never knew your Windows Phone 8.1 could do

        * Alexei Ramirez at center of White Sox' uncertain offseason outlook
        * Rodon sharp over 6, but offense falls flat
        * Twins 3, White Sox 0: No touching Tommy
        * White Sox arms of the future up to the task vs. Sano
        * Rodon sharp over 6, but offense falls flat
        * Montas returns with a much-improved slider
        * Back at short, Saladino looks to find niche with Sox

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        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

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * American Coal Co. lays off 110 workers at Galatia mine
        * EXCHANGE: Schaumburg teen's dental visit changes state law
        * Former Woodstock middle school principal accused of theft
        * Chicago sprays for mosquitoes to fight West Nile virus
        * Wheaton lawyer accused of bilking estates of clients
        * Will County seeing record year for wildlife with rabies
        * Rauner wins labor fight; Illinois House fails override
        * Illinois authorities searching for escaped prisoner
        * The Latest: Child care restoration fails in Illinois House
        * City of Peoria, creator of Twitter parody settle lawsuit

        * Illinois House comes up 3 votes shy of overriding union arbitration bill
        * Bill to stop Illinois State Museum closure advances in House
        * Override effort on union arbitration bill fails in House
        * Legionnaires' disease cases rise at Quincy veterans home
        * Union arbitration override fails in House
        * Illinois House Democrats seek to override Gov. Rauner on union arbitration
        * Veto override vote looms in Illinois House
        * All Democrats present as veto override vote looms in Illinois House
        * Illinois House faces crucial vote on union arbitration bill
        * United Way advance keeps Helping Hands shelter open as state budget impasse continues

        * Will more McMuffins mean more expensive eggs?
        * How has Chicago prepared for an oil train derailment?
        * Mattress startup Casper takes aim at Chicago
        * Motor Row Craft Beer & Wine Fest, a fringe theater fest and more
        * How to succeed in manufacturing


          * Boy, 11, accidentally shot to death had lost father to gun violence
          * Wife remembers slain Fox Lake officer: 'My best friend, my world, my hero, the love of my life'
          * 11 people shot dead, including 11-year-old boy, since late Tuesday in Chicago
          * Woman charged with faking report about suspects in Fox Lake cop killing
          * Emanuel set to call for largest property tax hike in modern Chicago history
          * Security ushers Emanuel away as Dyett protesters take to stage at budget hearing
          * Pope Francis comforts Chicago high school student over loss of her father
          * Rauner prevails on major labor bill as Madigan fails to muster votes


          * Our Opinion: Panhandling deserves a community response
          * Bernard Schoenburg: Ex-Schock aide says he saw red flags
          * Norbert Brauer: Trans Pacific Partnership a secretive, one-sided deal
          * George Will: The blood-stained Indian Child Welfare Act
          * Eugene Robinson: Digging a hole to build a wall
          * Illinois House comes up 3 votes shy of overriding union arbitration bill
          * Bill to stop Illinois State Museum closure advances in House
          * Legionnaires' disease cases rise at Quincy veterans home


          * Campus mugger: 'I need help'
          * Champaign Mayor Deb Feinen 9/3/2015
          * Rich Warren: Taking a byte out of your data usage
          * Tolono debating hunt to deal with coyotes
          * Notes-Worthy: Aaron Short and Carrie Chandler
          * Strum together: Ellnora launches at Krannert
          * Area guitar 'heroes' getting in on the act
          * Computer audit criticizes former employees' use
          * Chuck Koplinski: A surprising turn in 'Phoenix'
          * No leads in possible threats that brought lockdown to PBL schools


          * Lester: Group for fallen officers give Fox Lake cop's family $15,000
          * The Latest: Guatemalan president resigns in corruption probe
          * ECB's Draghi hints at further stimulus for eurozone
          * AP sources: GOP works to avoid third-party presidential run
          * US trade deficit drops to $41.9 billion in July

          * 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

          * Northerly Island Park opens Friday on Chic......

          * Sen. Kirk calls attention to International......

          * The Weekend In Chicago Rock
          * Hey Ya: Young Poets Break It Down
          * Senator Duffy endorses McConchie over Sauer to succeed Rep. Ed Sullivan
          * EXCLUSIVE Andrzejewski: The Bob Berlin Moment
          * The [Monday] Papers
          * The 'Beautiful Game' Turns Ugly: New Mob Museum Display Explores Corruption Of FIFA
          * Chicago To Assist Families Impacted By Rauner's Child Care Cuts
          * Sony Softened Concussion To Placate NFL
          * Former Minnesota Governor Talks 2016 With Henry Rollins
          * Dyett Protesters Shut Down Emanuel's Budget Town Hall


          * Legionnaires’ Disease Cases in Quincy
          * Legionnaires’ Disease Outbreak at Illinois Veterans’ Home-Quincy Update
          * Governor Bruce Rauner Proclaims Workforce Development Week
          * Veteran Spouse Ada Ruth Cripps Honored As The IDVA Volunteer of the Year
          * State-Teamsters One Step Closer to Finalizing Agreement




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