New Jersey wants to outsource some of the functions of its state lottery.

The state is requesting proposals from private companies to manage the lottery sales, marketing and development of its games.

New Jersey Treasury Department spokesman Bill Quinn says a private contractor could generate significant growth in lottery revenue.

 “The state lottery operates under an annual budget appropriation so it’s often limited in what type of efforts it can put in to developing new products, getting them to market.  It can also incentivize the sales force, give them motivation to hit sales targets. That’s something the lottery can’t do currently with its sales force.”

The winning bidder would be required to pay the state $120 million at the start of the 15-year contract and would get a return based on the growth in revenue it generates.

Gambling industry analyst Patricia McQueen says there is a downside to outsourcing  some of the lottery’s functions.

 “No private company is going to come in if they can’t make money at it. So you’re basically sharing whatever profits lottery is generating with somebody else. Yes you’re getting money up front but then you’re obviously giving up some over the years because obviously those companies want to make money.”

Boston College economics professor Richard McGowan wrote three books on the gambling industry. He has another concern about a private company taking over some of the lottery’s functions.

“The federal government now has basically allowed the states to sell lottery tickets on the Internet. So a lot of states are now going to start offering all of their games on the Internet. I doubt if a private firm is going to be allowed to do that.”

The bids have to be in by mid November. The goal is to have a private contractor take over some of the lottery’s functions sometime in the first half of next year.