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Two Illinois Lottery private management contract bidders await their fate

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Within 24 hours or so, Gov. Pat Quinn should be getting his recommendation from the Illinois Lottery evaluation committee (all of whom remain anonymous in this transparent private management bid process) regarding which of two finalist bidders -- Northstar Lottery Group and Camelot Group -- should become the first-ever private manager of the Illinois Lottery.

Whether or not Quinn realizes it yet, his expected selection of a winner days later could cause big problems for the governor, who is in a tough fight to retain his job in the November elections. The Illinois Lottery is an important generator of income for this state, and if he helps make a mess of its management, big trouble could ensue.

Many who have watched this private management bid process play out over the past several weeks believe it was nowhere near as transparent as the people who ran it keep trying to suggest it has been. And as was made clear during the Q & A portion of yesterday's public hearing, many people, including experts in the lottery world, don't understand why only three entities wound up submitting proposals by the deadline. Or why those three were quickly whittled to just the two finalists.

Sources repeatedly have told us one reason so few bidders finally stepped up to the plate was the onerous first draft of the private management agreement (PMA) that was distributed in advance of the bid deadline. In hindsight, some sources now suspect that first version of the PMA may have been made purposely onerous by its creators in order to discourage as many bidders as possible.

Certainly the last version of the PMA that Northstar and Camelot used to tailor their submissions to the Illinois Lottery evaluation committee was a vastly different version than the initial one issued before the bid deadline. One source who carefully word-checked the initial version of the PMA with the final version discovered that some 13,781 words had been added to the final document and another 7,017 words deleted. That level of verbiage adjustment suggests amendments to the PMA were anything but superficial.

Whatever the case, the Illinois Lottery has its two finalists, and perhaps that is all the Lottery and its anonymous evaluation team wanted to have to deal with all along. Certainly Illinois Lottery acting superintendent Jodie Winnett was at a loss to come up with a credible answer at Wednesday's public hearing when she was pointedly asked why so few bidders ultimately surfaced to contend for this groundbreaking private management contract to run the Illinois Lottery.

Neither of the presentations from Camelot and Northstar Lottery Group at the public hearing was what we'd call breathtaking. But of the two, we'd certainly say Camelot's was the smarter. Its presenters made clear that they would enter into a private management agreement beholden to no vendors that currently have contracts with the Illinois Lottery. Northstar, of course, could make no such claim, since its three principals -- Gtech, Scientific Games and Energy BDDO/Chicago -- all have existing contracts with the Illinois Lottery.

We also liked the way Camelot kept reiterating that it is a services and marketing company. And in the end, getting the Illinois Lottery where it needs to be as a generator of income for the state and as an entity that Illinois residents want to play is, most definitely, a marketing challenge that must be met.

The governor's representative at Wednesday's public hearing was allowed to ask questions. But the mundane nature of the couple of questions he lobbed at the two bidders indicated Quinn won't be getting much useful feedback from his minion at the public hearing.

Quinn is going to have look at the whole way this private manager bid process has played out and ask himself the tough question: Is he satisfied with the process and the recommendation made to him? If so, he can name a private manager. If not, well, he could ask that the whole process be repeated -- this time with new people overseeing it and a new, more transparent effort to make sure the whole bid process is totally transparent.

This much is known: Quinn's Sept. 15 decision date fast approaches.

5 Comments

As Lazare said, Quinn really needs to take into consideration that awarding this contract to Northstar can have a direct effect on his campaign. It certainly gives Brady an opening for going after Quinn for protecting the status quo, and Quinn can't afford any more bad news.

Gov. Quinn needs to make sure this contract goes to Camelot! Bill Brady as governor would be bad news for Illinois, so Quinn shouldn't give him any more ammunition.

Does anyone else feel like Quinn is playing it safe? Go for the change. At least then no one can say you aren't trying to improve things.

Lottery management just hasn’t done a good job of managing the lottery. Nor has it done a good job of serving Governor Quinn during this whole process. Picking Northstar, which is just a mask for the existing lottery vendors, is simply not an option for Quinn because of the political firestorm it would create for him.

The current Lottery management has not done a good job of managing the lottery or of serving Governor Quinn well during the process of choosing a private manager. Picking Northstar would just be a mask for the existing lottery managers/ vendors. That cannot be an option for Quinn because of the attack that he would fall under. He is way too smart to choose Northstar.

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Lewis Lazare has written the Media Mix column for the Chicago Sun-Times for the past seven and a half years.

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This page contains a single entry by Lewis Lazare published on September 9, 2010 1:32 PM.

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