Korean firm offers to pay Loxley’s damages

Samsung in line to run Thai lottery

2013-03-08
Reading time 1:26 min
(Thailand).- The Seoul-based Samsung Group is likely to win the online lottery contract, replacing current contract holder Loxley GTech Technology (LGT), after offering to pay any damages demanded by the Loxley unit for contract termination by the government of Thailand .

Benja Louischaroen, director-general of the Customs Department and chairwoman of the Government Lottery Office (GLO), said the department has considered proposals by many companies and so far Samsung's has been the best deal. The GLO is preparing to handle any lawsuit from LGT, she said.

Benja is unhappy with delays to the installation of lottery machines. Under the plan, LGT should have installed a total of 12,000 units nationwide, but so far it has only installed 1,800 in Bangkok and 1,200 units in provincial areas. However, she did not address the point that the project has been stalled by political reasons for almost two decades.

The online lottery was initiated in 1996 when then-prime minister Banharn Silpa-archa, on his final day in office, signed a us$ 53.6 million deal with Jaco Co, a joint venture between Loxley and the US lottery firm G-Tech Co. The project was later suspended due to the strong opposition of some groups on moral grounds, prompting Jaco to seek compensation.

In 2005, the Thaksin Shinawatra government signed an us$ 268.1 million agreement with LGT, also run by Loxley and G-Tech, to resume the project. Thousands of lottery machines were installed nationwide, but the programme was shelved after the military coup by the Surayud Chulanont administration. Subsequent governments hesitated to resume the programme despite the concession agreement signed with LGT.

The GLO estimates the lottery will help to boost revenue by us$ 33.5 million per drawing or us$ 804.4 million per year.

Another reason for resuming the online lottery was that it would resolve the pricing problem. Punters have long complained that sellers, who include handicapped groups that receive ticket quotas from the GLO, are quick to charge higher than the us$ 2,68 face value for tickets with popular numbers.

The online lottery, however, will allow buyers to stipulate their desired two- and three-digit combinations for tickets, which should help to reduce demand for traditional six-digit paper tickets and ease the problem of overcharging.

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