NJ Lottery Defends Sales And Marketing Partnership

By David Madden

TRENTON, N.J., (CBS) -- New Jersey Lottery officials testified at a legislative hearing in Trenton that a partnership with a private firm to assist in sales and marketing has helped the state, despite revenue figures that are lower than projected estimates.

New numbers for fiscal 2015 put lottery revenues at $960 million, down a half percent from the previous year and well off the over one billion projected by bringing in Northstar. Lottery Director Carole Hedinger insists revenues would be far lower without the partnership given one uncontrollable trend.

"There has been a severe nationwide decline in consumers playing the big, multi-state jackpot games Mega Millions and Powerball," Hedinger told the Senate Oversight Committee.

Sales of those games dropped by over $100 million in New Jersey, resulting in a $45 million revenue loss. Hedinger says Northstar generated greater instant game sales within the state to soften the blow, and opened outlets in Rite Aid and Wawa stores.

"I don't mean to suggest for a moment that either the lottery or its partner, Northstar, believes flat revenues are where we want to be," Hedinger continued. "But achieving flat revenues in the face of incredibly challenging national trends that no one foresaw when our agreement with Northstar was executed is an accomplishment nonetheless."

Northstar has a similar partnership in Indiana, but Illinois recently cancelled its contract with the firm. Neither a company representative nor Hedinger could discuss the problems that prompted Illinois to act as it did.