- 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.


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

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