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Indiana lottery vendor docked in Illinois for low profits

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The private operator of the Hoosier Lottery faces a $20 million penalty in Illinois because it fell nearly $66 million short of the profits it promised that state.

The contract between the Illinois Lottery and Northstar Lottery Group requires the company to compensate the state when it doesn't reach certain targets for net income. Northstar promised $823 million in fiscal year 2012, but Illinois officials estimated it generated $757 million. The company disputes that figure.

Northstar is 80 percent owned by Rhode Island-based GTECH Corp. GTECH won the Indiana contract in October.

Hoosier Lottery officials told The Indianapolis Star the Indiana contract is less complicated than that in Illinois.

Indiana's contract pays GTECH bonuses for exceeding sales thresholds and penalizes the company for not meeting them.

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