CWA Challenges Lottery Contract to Northstar

By Dari Kotzker
NJ Today

An administrative hearing was held today at the NJ Division of Purchase and Property to hear the oral arguments of the CWA and GTECH (a member of the consortium that makes up Northstar New Jersey Lottery Group). The hearing is the result of CWA challenging the award of the contract to Northstar to run the New Jersey State Lottery, the state’s fourth largest revenue source. Each party received 30 minutes to present their side, and the decision will ultimately be made by the Director of the Division of Purchase and Property.

CWA’s protest was broken down into three arguments: that the contract violates the state constitution and the state lottery law, the inclusion of a management fee is a material exception to the Request for Proposal, and issues with $120 million dollar accelerated guarantee. CWA also cited examples in the state’s history that any level of private involvement in the lottery or gambling that deviates from its original intent has been a question that’s been put to the people of New Jersey, and that’s not the case here. They also questioned the percentage of lottery revenue that will continue to go to state and educational institutions, and how much oversight the state will have over the company’s decisions.

The legal representatives from GTECH said CWA’s arguments have no merit. The contract guarantees to maximize lottery revenues for the public good by growing revenue by 0.6 percent every year, which the state lottery has not achieved. It also states Northstar will be responsible to make sure the mandate of the lottery commission is fulfilled, and will continue to provide funding for state and educational institutions. They reiterated that the state has the ultimate decision making power, can counter any decision made by Northstar management, and can terminate the contract if needed. The lawyers said there is a strong public interest to move this forward, and CWA’s arguments are inaccurate and an attack on Northstar’s integrity.

The next step for both parties is to submit summations in writing by close of business on Tuesday, based on what they heard today.