Lottery ticket sales plummeted last year, breaking a seven-year winning streak

New Jersey's lottery lost more than $100 million in ticket sales last year, ending a streak of record sales that began before its core operations were privatized in a controversial deal pushed through by former Republican Gov. Chris Christie.

Despite the drop in ticket sales in the 2017 fiscal year that ended June 30, the lottery contributed more money than it had the previous year to education and social service programs: $994 million, compared to $987 million in the 2016 fiscal year, according to its annual report.

The private operator of the lottery, Northstar New Jersey, was awarded $103 million in fees and expenses, $1 million less than it earned the previous year, the report said.

More: N.J. lottery market changes, but lowered expectations remain

More: N.J. lottery-pension plan "slightly positive," Wall Street ratings agency says

In all, lottery ticket sales fell $30 million short of budget projections, according to the audit. The lottery sold $3.186 billion in tickets in 2017; it had budgeted to sell $3.216 billion. The lottery sold $3.289 billion in tickets in the 2016 fiscal year, its seventh consecutive year of record sales.

The report does not indicate a reason for the drop in sales, and representatives for the lottery did not respond to a message seeking comment. Northstar declined to comment.

Although the lottery was created nearly 50 years ago to benefit education and social service programs such as homes for disabled veterans, psychiatric hospitals and tuition grants, a law signed by Christie last year redirects lottery revenue to the public employee pension fund beginning in the current 2018 fiscal year.

The move was widely supported and seen as a benefit to the heavily indebted system because it would provide a regular revenue stream to the fund.

But by the law that created the lottery in 1970, at least 30 percent of revenues must go to the education and social service programs it was designed to benefit. That money must now come out of the general budget.

The lottery has been tinkering with its offerings for years trying to stimulate sales even though it notched record amounts the past decade.

Popular "draw" games like Powerball and Mega Millions were changed to create bigger jackpots, it has introduced higher-priced instant tickets with bigger profit margins and last summer introduced Quick Draw, a keno-style game that has drawings every few minutes and is played mostly in bars and restaurants.

Lottery staples like Pick-3, Pick-4 and Pick-6 all came in under budget last year, as did Mega Millions. Powerball was one of the few draw games that outperformed expectations.

Even though ticket sales reached new highs in recent years, Northstar proved it could not meet its ambitious income goals for the state when it took over sales and marketing of the lottery in 2013. The privatization was controversial with some lawmakers who saw it as a cash grab in tough financial times because the conglomerate paid $120 million up front.

Northstar had promised to deliver "at least" $1.42 billion to the state over the 15-year contract, but the state slashed Northstar's targets by $1 billion over the life of the agreement as it struggled to meet its own projections. But with those lower goals, Northstar has still been rewarded with hundreds of millions of dollars in fees and awards.