Illinois Lottery makes last call for bids from private management companies

Lottery makes last call for private manager bids

CHICAGO — The Illinois Lottery made a last call for bids Friday from private companies looking to manage the agency’s operations in a deal that officials say could boost revenue and bring in a new group of gamers.

The lottery was scheduled to accept bids through late Friday afternoon. Lottery officials aren’t releasing information about the bidders until Aug. 12, according to spokeswoman Susan Hofer.

Gov. Pat Quinn must choose a winner of the 10-year contract by Sept. 15.

Legislators pushed for the private management company because lottery revenue had been stagnant for some time and “state bureaucracy is not … in the best position to actively try to remarket the lottery,” said Rikeesha Phelon, spokeswoman for Senate President John Cullerton.

“He (Cullerton) believes that outsourcing that management function to a private business might bring in additional dollars because they would be better equipped to market the lottery to a different group of people,” she said.

The plan doesn’t mean the state is selling, leasing or privatizing the lottery, Hofer said.

“We are not contracting out the lottery,” she said. “We are hiring a manager to bring state-of-the-art management tools and marketing ideas to maximize revenues.”

The private manager will be in charge of business operations such as marketing, ticket sales and lottery machines. Hofer said state employees will still oversee contracts and make sure the lottery is run fairly, though Phelon said it’s unclear whether any lottery employees will lose their jobs in the deal.

The lottery has annual sales of more than $2 billion and is one of the state’s largest sources of revenue. Lottery proceeds are used to fund education and capital projects.

Officials are still working out the compensation details of the management plan, Hofer said. Some options could include the state paying the private manager a portion of the lottery sales or the manager paying the state for the right to run the lottery system.

Public interest organization Citizen Action/Illinois is uneasy about involving a private company in what had been a publicly run entity.

“There’s a danger when you start handing over public services to private interests,” said Lynda DeLaforgue, the group’s co-director.

“The state can’t afford to mess around with our fourth-largest source of revenue at a time when we’re struggling,” she said.