Indiana News

Company That Runs Hoosier Lottery Faces Fine In Illinois

GTECH owns most of Northstar consortium that runs Illinois Lottery

3/20/2013


Indiana Lottery Commission (wibc.com file photo: Ray Steele)

The company that operates the Hoosier Lottery could have to pay millions of dollars in fines in Illinois.

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The state of Illinois says Northstar, which is a consortium of lottery companies GTECH and Scientific Games, owes $20 million because it missed projected revenue targets during the first year it ran the Illinois Lottery. GTECH owns 80-percent of Northstar; last October, it signed a 15-year contract to manage the Hoosier Lottery.

The size of the Illinois fine has long been disputed by Northstar, which claimed the penalty should be smaller because Illinois undercounted revenues. Just before GTECHs deal with the Hoosier Lottery was approved, an independent mediator sided with Northstar, saying the Illinois Lottery failed to deliver on promises related to advertising and other issues.

Despite falling short of its projection, the revenue generated in 2012 set a record for the Illinois Lottery. When the contract was approved last year, Hoosier Lottery executive director Kurt Browning said GTECH would generate more than $2 billion a year in revenue over what the lottery would generate were it to continue to manage the games on its own.

Indiana's contract with GTECH is different than the deal between Northstar and Illinois. GTECH has promised Indiana more than $500 million in additional revenue over the first five years of the deal, and has to pay the state the difference if there is a shortfall.

@WIBC_RaySteele

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