Hetty is NJ director of CWA. Promoted by Rosi
In a few days “bids” will be due on a secret plan to sell the New Jersey Lottery. It isn’t being called a sale or “monetization” as Corzine called it, but that’s what it is. It’s being hidden under the cloak of privatization of sales and management.
I’ll get to the details in a second. This is a bad deal and the fix may be in. But we are building public support to defeat the plan. For starters, you can head on over to www.biggamblenj.com. Sign our petition to tell the governor we need to stop this deal to prevent fraud and harm to locally-owned small businesses. Follow our campaign on twitter, @BigGambleNJ. And most importantly, call the governor and your legislators and demand that they do everything they can to put a stop to this.
Here’s what the Governor is doing. The winning bidder will pay the State $120 million to
buy I mean to “manage” lottery sales. The State will get its legally required cut of lottery sales, which means that the contractor has to expand sales and cut corners in order to make its profit.
All the experienced State Lottery workers will be laid off, and the contractor will handle lottery sales. In order to expand the sales they will favor Big Box stores and chains and online lottery sales so that they don’t have to go out and visit tiny newsstands and gas stations. They can charge fees for lottery machines and to fix the machines. Governor Christie estimates that the winning bidder will make $1 billion.
This will have a devastating impact on small and local businesses throughout New Jersey that depend on lottery sales. If people buy lottery tickets from Walmart instead of their town newspaper store, they also don’t buy gum, cigarettes, coffee and a snack for the road from their local store. The deal is a business killer.
There’s also evidence the skids are being greased to sell the lottery operations to GTECH, a company which has a very clear record of graft, fraud, and abuse from Brazil to Rhode Island. GTECH’s national sales manager went to jail for five years for conspiring with a New Jersey political firm in connection to a $750,000 laundering and kick-back scheme in the 1990s. Illinois is the only other state to have privatized its lottery functions so far, and it is run by a subsidiary of GTECH’s called the Northstar Lottery Group. How are we doing in Illinois? Taxpayers there are currently in a legal process with the state of Illinois for failing to meet its revenue goals by nearly $150 million in 2012, and the company already says they’re going to miss revenue estimates by $120 million over the next four years. Talking about the shortfall in Illinois-a quarter of a billion dollars over the first five years alone-the GTECH spokesman shrugged if off, saying “That’s the nature of pilot programs.” You can guess who’s on the hook for that lost revenue, and make your own mind up about whether you’d like this “pilot program” here in New Jersey.
There’s more. Right now, public employee lottery workers don’t know which lottery tickets go where. They can’t control and have no incentive to steer winning tickets one way of the other. But a private lottery vendor (especially G-TECH that already delivers the New Jersey Lottery tickets) has a lot of incentive to send winning tickets to places that it wants to increase sales because they get a bigger cut or the servicing costs less.
The up-front cash infusion to the state of $120 million that the deal requires is just the type of revenue gimmick you need if you’re a Governor making the case for a tax cut that everyone knows we can’t afford. The proposal calls for slashing worker pay and eliminating public worker jobs, there are no standards to protect services or stop cronyism and political graft and it kills small business.