Irish government seeks bids for National Lottery licence

A report in the Irish Independent newspaper said Tatts had held talks with Ireland's Department of Public Expenditure about the business, which had annual sales of 761 million euros last year, a decline of 1.4 per cent in a ''very challenging retail environment''.

Other possible bidders for the 20-year licence are Camelot, which is owned by the Ontario Teachers' Pension Plan, Italian Lottomatica subsidiary GTech Corporation, and the incumbent operator, An Post, the report says.

A spokesman for Tatts Group, Michael Mangos, told BusinessDay Tatts would take a look at the business, depending on what the final model looked like. Advertisement Shares in Tatts Group closed at us$ 2.77 Tuesday, in a negative market.

The Irish government is now seeking advisers for the sale, the proceeds of which are earmarked for a children's hospital. But the Bank of America Merrill Lynch analyst Mark Bryan said last month Camelot would probably emerge with the National Lottery licence, although Tatts was ''well placed to secure South Australian Lotteries''.

''We view success for Tatts as very remote and expect Camelot to secure the deal,'' he said.
''Additionally, with some potential for Irish exit of EUR [the euro], we see too much incumbent risk for the buyer i.e. a EUR exit is likely to see significant currency deflation, which could present the risks of FX translation and potential write-downs.''

Almost two-thirds of Irish adults play National Lottery's games regularly, according to the annual report for last year. The company has 108 employees and deals with 3780 retail outlets. Last year, 30.5 per cent of its revenue went to ''good causes'' in Ireland.

''What started as a relatively modest business in March 1987 with just one scratch card game and sales of 130 million euros has grown steadily to achieve total sales of over 12 billion euros over the first 25 years,'' the annual report says.

Lotto-related draw games comprised half of National Lottery's sales last year. Online game sales grew by 65 per cent to 6.1 million euros; revenue from scratch cards edged up to 158.4 million euros. An Post holds 80 per cent of National Lottery's share capital.