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Tattersall's loses lottery monopoly

Oct 12, 2007, 5:06 pm

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InternationalInternational: Tattersall's loses lottery monopoly

In Australia, Tattersall's 54-year monopoly on Victoria's lotteries has been broken as the State Government seeks to make more money from the lucrative market.

Under the new arrangement, Tattersall's will keep such lottery products as Oz Lotto, Powerball and the Saturday Lotto but lose the instant lotteries or "scratchies" part of the market to Greek company Intralot.

The lottery license process has been plagued by controversy with accusations of improper action by lobbyists, including former Labor minister David White.

Questions about the propriety of the tender process have sparked judicial and parliamentary inquiries.

The 10-year licenses start on July 1st next year.

In other developments:

  • The Victorian Government predicts it will make $3 billion over the next decade from the licenses, with the money to be spent on hospitals.
  • A review of the propriety of the license process released yesterday by retired judge Ron Merkel QC found that both Tattersall's and Intralot had been treated equally and impartially but criticized the role that lobbyists played in the lotteries tender.
  • Gaming Minister Tony Robinson refused to rule out instant lottery to Internet and mobile phones.

Premier John Brumby said that giving the licenses to two companies would create a better financial return than the current monopoly arrangement.

"This competition will ensure a better return to Victoria over the next 10 years than if an exclusive license had been awarded to one company," Brumby said.

The Government will receive a sign-on fee of up to $30 million from the companies.

Robinson said Victorians had had a long love affair with "lotto" products, but he would not say if the scratchies market would be opened up to the Internet and mobile phones.

"It has always been the case that the lottery license holder has been free to innovate as they see fit," he said.

Last December, the Government awarded a 12-month license extension to Tattersall's, worth at least $100 million, after a Government committee bungled a report to recommend whether the gaming giant or Intralot should get the license.

The lottery license process was also clouded by allegations against White, who was working for Tattersall's.

During last year's election campaign, then premier Steve Bracks ordered an independent panel to examine the lottery and electronic gaming machine license process, which is headed by Merkel.

Tattersall's chief executive Dick McIlwain said while it was not ideal to lose some of its products, including scratchies, the Government's decision would not affect the company's profits.

"In a way it was more symbolic than commercial," he said. "It's got some emotional significance here at Tattersall's, we've held it for a long time and it's synonymous with the man in the hat."

Tattersall's earned $35.3 million from its lotteries business in fiscal 2007. Lotteries make up about 7 per cent of Tattersall's total annual operating profit.

Intralot director Tony Sheehan welcomed the decision, saying the company would use its technology to run the games more efficiently.

"We can make the existing games more attractive," he said. "There may be new games but I can absolutely, categorically rule out mobile phones, SMS, that sort of stuff."

Opposition gaming spokesman Michael O'Brien said the worry with the new license was that Intralot had a huge incentive to encourage more Victorians to gamble.

"Gambling is part of our society, it is part of our life but we need to have more of a recognition of the problems that problem gambling can entail," he said.

Lottery Post Staff

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