N.J. Lottery pulls poker game three days after launch

Three days after launching a new scratch-off game promising more than $13.6 million in prizes, the state lottery rushed to pull the game off store shelves because of confusion about the rules.

It is the latest mishap for the lottery under a private operator that was hired to bring in more money and improve the technology of one of the state's largest revenue sources. But the operator, Northstar New Jersey, has struggled to deliver on its promises and come under legislative scrutiny for its performance running the sales and marketing of the lottery.

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Jackpots have reached new highs in "draw" games like Powerball and states, including New Jersey, have set record ticket sales in recent years. But it has not translated to the soaring profits that New Jersey was promised, while Northstar has been paid $275 million in fees and expenses in the past three fiscal years, according to annual reports.

The lottery started selling a new scratch-off game called High Stakes Poker on Aug. 7, putting more than 1 million tickets on shelves around the state. The $5 game had a top prize of $150,000. The object of the game is for the player to beat the dealer's hand. But by Aug. 10 there had been confusion over the rules "when a handful of players questioned their win scenario," lottery spokeswoman Judy Drucker said in an email.

"The New Jersey Lottery has discontinued the sale of the High Card Poker instant game due to player misunderstanding of the game’s win scenarios, as stated on the back of the ticket," Drucker said.

One player, Robert Chalet, told the news site TAPinto.net that he thought he had a winning hand with the $150,000 grand prize, but when he went to cash in was told, "You won and you didn't win." Chalet, of Bloomfield, had a hand of 5-6-9-J-Q, while the dealer held 4-6-7-10-Q, according to the news site. If the player and dealer in a real poker game have the same high card, the second-highest card would break the tie, according to pokerstars.net. In that scenario, Chalet would have the winning hand since a jack trumps a 10. But the directions on the scratch-off do not consider a tie.

Drucker said that the TAPinto.net "article is inaccurate," but declined to elaborate. She said that all winning tickets in circulation will be honored, and that more than 42,796 tickets were claimed by players totaling more than $583,000. Chalet did not return a message seeking comment.

The confusion over the game rules abruptly diverted resources as workers traveled around the state gathering tickets and using black markers to cross out advertisements for the new game. The lottery website says that 4,368,360 million tickets for High Card Poker were printed, but Drucker said just about 25 percent of the "intended print run" was sent to retailers for the launch.

In August 2015, with big-jackpot game sales lagging, the lottery rolled out a new series of "Fast Play" games with instant results designed to attract new players. But the launch caused a blackout that blocked nearly half the state's retailers from printing regular draw games such as Pick-3 and Powerball.

Under Northstar, the lottery has turned increasingly to scratch-off and other instant games to bolster its bottom line as sales in big-jackpot games such as Mega Millions fall short of expectations. Last month it rolled out the keno-style Quick Draw game in several hundred bars and restaurants, where players can bet on games every five minutes. But instant games have smaller profit margins for the state and new offerings have performed up to nearly 70 percent below budget, according to unaudited figures included in the lottery company's monthly report.

Northstar has had its budget projections cut by $1 billion over the life of the 15-year contract since taking over the lottery's core functions in 2013. It is expected to hit its $965 million figure for the 2017 fiscal year, far less than the $1.07 billion it had originally promised. As of July the lottery had brought in $945 million, according to the unaudited figures, but the Treasury Department said there is still one more payment left and that the state was on track to "meet or exceed" its target.

Carole Hedinger, executive director of the Lottery Commission, said in June that the lottery isn't likely to have "bragging rights" among states for sales, "but we will have some of the best revenue results that lotteries can have," according to meeting minutes.

Under a new law signed by Gov. Chris Christie last month, lottery proceeds going forward will be redirected to the public employee pension fund rather than to education and social-service programs the lottery was created to support. The company estimates it will bring in $1.04 billion for the state in the 2018 fiscal year, which began July 1.

Northstar is regularly introducing new games and ventures in an effort to attract younger players who prefer immediate results to waiting days at a time for drawings of games such as Pick 6, Mega Millions and Powerball. And sales of those games have declined over the past year by $110 million, according to preliminary lottery data.

The Fast Play game, introduced last summer, has not proven to be the lure the lottery had anticipated it would be. Sales dropped 44 percent from 2016 to 2017, according to lottery data. The Quick Draw games are said to be part of Northstar's strategy to prop up the lagging sales of other games.