- Associated Press - Wednesday, December 10, 2014

CHICAGO (AP) - State officials’ handling of an Illinois Lottery agreement became the latest bump in the handoff between gubernatorial administrations as Gov.-elect Bruce Rauner’s legal team said Wednesday it is weighing options to fight a contract termination deal signed by Gov. Pat Quinn that the Republican alleges hurts taxpayers.

Quinn’s office and lottery officials announced Tuesday they had officially ended the state’s contract with Chicago-based Northstar Lottery Group through an agreement. The private vendor didn’t reach the ambitious sales promises it used to win its bid in 2010 and the parties worked out long-term details to avoid costly lawsuits.

But Rauner spokesman Mike Schrimpf claimed the agreement was essentially a hefty new contract binding Illinois’ hands for years and eliminating the ability to collect penalties, which would equal lost revenue.

“It is essentially a state pardon for Northstar wrapped in taxpayer-funded giveaway,” Schrimpf said in a statement.

Lottery Director Michael Jones dismissed the claims, saying it was a good deal for the state.

The transition of power hasn’t been smooth, given disagreements over raising the minimum wage and hiring, among other things. Rauner, a Republican businessman from Winnetka, takes office next month and has already warned lawmakers not to take up major issues before then. Rauner ousted the Democratic governor last month after a bruising campaign.

Termination of Northstar’s contract was expected, as Quinn in August directed the Lottery to end the relationship three years into Northstar’s 10-year contract.

Jones said the agreement was the result of months of negotiations and avoided major anticipated legal fees that were expected. He said it was the most cost-effective way to end the contract.

“It allows the state to seek a new private manager who can maximize the value of the Lottery,” he said.

But Rauner’s team characterized it as a “secret” deal. And Schrimpf said attorneys for Rauner’s transition were considering legal options, but declined to discuss them.

According to the agreement, Northstar will get reimbursed up to $12.65 million for costs. Subcontractors Gtech and Scientific Games, who will be technical vendors until at least 2018, will provide services at a lower rate in the interim.

Northstar officials didn’t return a message seeking comment. They’ve previously acknowledged they didn’t meet goals, but said the state made some things harder, such as canceling games it wanted to launch.

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Follow Sophia Tareen at https://twitter.com/sophiatareen.


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