The New Jersey Lottery is not broken. The question: Why does the Christie administration want to "fix" it by privatizing lottery sales and marketing?
Even more to the point: If privatizing these lottery functions is such a good deal for the state, why won't the administration allow the state treasurer to testify about the plan before the Legislature?
Under current law, Gov. Chris Christie does need the Legislature's approval to go through with the privatization deal. The state Senate and Assembly have approved a bill that would require legislative approval of any lottery privatization deal; Christie, of course, is unlikely to sign it.
But what possible reason could there be to do this deal without the Legislature's oversight?
Which brings us back to the original question: Why try to fix something that isn't broken?
The New Jersey Lottery is one of the most successful in the nation. It brought in a record $2.7 billion last year, a 4.5 percent increase (30 percent of lottery revenue is dedicated to education and state social institutions). Administrative costs amount to less than 1 percent of lottery revenue, giving the New Jersey Lottery the highest net income of any state lottery in the country, according to a statement from Senate Democrats.
Under the controversial privatization plan - which involves a lengthy 15-year contract - the state would get an upfront payment $120 million. The private firm that wins the deal would get a percentage of any increase in lottery revenue it generates - an arrangement expected to be worth $1 billion over the life of the contract. If the firm does not reach growth targets, it would have to pay a penalty to the state - but state lottery revenue already consistently grows year over year.
The proposal attracted exactly one bidder - a consortium of three firms, including GTECH, a controversial Italian firm that has operated the state lottery machines since 1984.
In 1996, a federal jury convicted GTECH's former national sales manager of participating in a kickback scheme with a political consultant from Egg Harbor Township. (Lt. Gov. Kim Guadagno was the assistant U.S. attorney who prosecuted the case.)
According to a March 11 report in The Record newspaper, today GTECH has hired a lobbying firm headed by David Samson, who led Christie's transition team, and a public relations firm headed by Mike DuHaime, the chief strategist for Christie's re-election campaign.
If all this isn't an argument for more oversight of this deal, we don't know what is.