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updated: 8/15/2014 4:40 PM

Illinois ending contract with lottery vendor 3 years into 10-year contract

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  • The state Friday fired the private company that managed the Illinois lottery after profits didn't meet expectations.

      The state Friday fired the private company that managed the Illinois lottery after profits didn't meet expectations.
    Mick Zawislak | Staff Photographer

Associated Press

Illinois will end its contract with the private vendor that operates the $2 billion-a-year state lottery over "serious concerns" with company performance, state officials announced Friday.

Gov. Pat Quinn directed the Illinois Lottery to end its relationship with Northstar Lottery Group three years into a 10-year contract, spokesman Grant Klinzman said in a statement.

Questions over Northstar's performance aren't new. The company hasn't reached the ambitious sales promises it used to win its bid to the state in 2010.

"The administration has had serious concerns with Northstar's performance," Klinzman said in an email. "The state is in the process of finalizing a path that will allow the Lottery to move on, improve profits and increase funding for education and economic development across the state."

State Rep. Jack Franks, a Marengo Democrat, had loudly called for Northstar's ouster and praised Quinn for the move.

"The experiment didn't work," Franks said.

"I first would like to commend the governor for doing the right thing," he said. "I don't get to say that often enough."

Illinois Lottery spokesman Mike Lang said the lottery supported the Quinn administration's direction and that lottery services and products would remain available during the transition to a new manager.

Chicago-based Northstar officials didn't immediately respond Friday to messages from The Associated Press.

Northstar officials have said the state made some things harder, such as canceling games it wanted to launch and prohibiting the sponsorship of Chicago's Pitchfork Music Festival in 2013 because of headliner R.Kelly.

Quinn's office declined to address those questions Friday.

Northstar officials have acknowledged that they didn't meet goals but said there were some successes. That included raising lottery profits by almost 10 percent in 2012. Some store owners noted improved customer service.

The Daily Herald reported in June that many suburbs in particular had seen big rises in lottery ticket sales in recent years.

But because sales were paltry in the suburbs to begin with and Chicago didn't see similar increases, profit gains weren't big enough for the state to want to keep Northstar.

Northstar promised contributions of $1 billion to the state in the fifth year of its contract when it took over the 40-year-old Illinois Lottery, but it has fallen far short. The money was supposed to go to schools, charitable organizations and a capital construction program.

• Daily Herald Political Editor Mike Riopell contributed to this story.

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