An Post and Camelot to run lottery after €405m bid

Joint bid ahead of €300m industry estimates for new licence but short of €500m touted in political circles

Under planned operating terms, the licensee will have greater flexibility to operate online. Currently the business
lottery
 makes 
justless than
under 3 per cent of its revenue from online sales, substantially less than operators in other jurisdictions.

Under planned operating terms, the licensee will have greater flexibility to operate online. Currently the business lottery makes justless than under 3 per cent of its revenue from online sales, substantially less than operators in other jurisdictions.

 

An Post and UK operator, Camelot, have won the licence to run the National Lottery under a new 20-year contract that will allow for a greater shift into online gaming.

Minister for Public Expenditure and Reform Brendan Howlin announced that the Government had selected Premier Lotteries Ireland, made up of State company An Post, its pension fund and Camelot’s owner, Ontario Teachers’ Pension Plan, as the preferred bidder for the licence.

Premier Lotteries offered to pay the State €405 million for the franchise, the highest of the three bidders that entered the licence competition. This was well ahead of the €250 million to €300 million industry estimates that emerged in the bidding process, but short of the €500 million figure touted in some political circles.

Talks on finalising the licence terms will begin shortly between the Department of Public Expenditure and Reform and the consortium. According to Mr Howlin, these are likely to end around November and a deal should be signed the following month.

The new consortium will pay the €405 million fee in two instalments, the first once the deal is signed later this year and the second once the partnership takes over running the lottery when the new licence is activated in October 2014.

Last July, Mr Howlin said that about €200 million from the sale of the licence would be used to fund the proposed new national children’s hospital, while the balance could be allocated to other projects.


Good causes
Premier Lotteries will have to pay 65 per cent of its gross revenues, that is, sales less what it pays out in prizes, to good causes. Retailers will receive the same commission for selling tickets.

In a statement, the Minister said the terms and conditions of the 103 National Lottery staff would be “addressed in a positive way in proposals from the Labour Relations Commission”.

Under planned operating terms, the licensee will have greater flexibility to operate online.

Currently the business makes under 3 per cent of its revenue from online sales, substantially less than operators in other jurisdictions, mainly because of a cumbersome registration process that has been relaxed under new legislation.

An Post has the current licence and owns the Irish National Lottery Company. Camelot has operated the UK lottery since it was introduced in 1994.

Mr Howlin said along with submitting the highest bid, their partnership was chosen because it met the “essential requirements” for the licence laid down by the Government when it decided to hold the competition last year.


‘Extensive experience’
The other two bidders for the licence were US-based gaming systems and technology specialist Gtech, and Australian tote betting and gaming firm, Tatts.

Reacting to the sale last night, Sinn Féin spokeswoman on public expenditure Mary Lou McDonald said there was no doubt the money raised from the sale “will be disappointing for many”.

She said what was of particular concern for Sinn Féin was the future of the current staff employed by the National Lottery.