State: Lottery manager short on profits, owes penalty
SPRINGFIELD – The private operator of the Illinois Lottery faces a $20 million penalty because it fell nearly $66 million short of the profits it promised the state in its inaugural year, state officials said Monday.
Northstar Lottery Group will have to pay the penalty even though its sales were nearly $400 million higher in fiscal 2012 than in the last year the state administered the lottery, state officials said.
The contract between the Illinois Lottery and Northstar requires the company, which took over management in 2011, to compensate the state when it fails to reach certain net income targets. Northstar promised to generate $823 million in net income in fiscal year 2012, but Illinois officials have estimated that it generated $757 million.
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