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Franks wants state lottery management group fired

Published: Wednesday, May 14, 2014 12:01 p.m. CDT • Updated: Wednesday, May 14, 2014 11:51 p.m. CDT

CRYSTAL LAKE – State Rep. Jack Franks called on Gov. Pat Quinn to fire the state lottery operator after it has failed to reach contractually stipulated goals the first three years of the contract.

The Marengo Democrat held a news conference in Springfield on Wednesday to pressure the governor to end the agreement with Northstar Lottery Group, the private company Quinn chose to head the state lottery program.

Franks says the lottery operator is costing the state hundreds of millions of dollars in management fees while underperforming – costing hundreds of millions of dollars more.

Franks also told the Northwest Herald the contract was “almost preordained” to Northstar.

“This was his baby, 100 percent,” Franks said. “Now it’s a question of the governor’s inability to govern that he allows this to go on rather than siding with the taxpayers.”

Franks’ presentation Wednesday showed Northstar is expected to miss its promised profit target by more than $400 million in the first three years of the deal.

In the first year of the contract, Northstar fell short $68 million on its $822.8 million net income target. The company was $170 million short of the $947.1 million second-year target and is on track to be $201 million short of the $980 million goal at the end of this fiscal year.

Franks also pointed out the service’s inability to drive more retailers to the program. The lottery had a goal to bring 458 corporate retailers in and are yet to bring any, according to Franks’ presentation. About 400 independent retailers have joined, about 450 short of the 850 independent retailer goal, the presentation shows.

Franks said reforming the lottery service would be a step toward providing Illinois taxpayers with the return on investment they deserve.

“I’m not going to sit back while [Quinn] tells everyone we have to raise taxes – this is the only way,” Franks said. “It’s not the only way.”

Quinn has come under fire lately for alleged political hiring at the Illinois Department of Transportation. A legislative panel also recently has granted itself subpoena powers to look into spending within Quinn’s Neighborhood Recovery Initiative.

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