independent

Friday 25 April 2014

An Post now seeking bid partner for Lotto licence

Italy's G-Tech among frontrunners for shot at €600m lottery contract

There was no winner of tonight's Lotto jackpot of just under €4 million

An Post is talking to a number of international lottery companies about making a bid to run the new €600m National Lottery licence.

The State company, which has run the National Lottery since 1987, plans to partner with one of these companies to bid for the licence. One potential partner which An Post has talked to is G-Tech, which is owned by Italian gaming giant Lottomatica. The Sunday Independent understands the talks between An Post and a number of potential partners are ongoing.

Speaking to the Sunday Independent, An Post's Barnie Whelan said: "We certainly intend to be part of the bid process. We would see ourselves partnering with another entity. We have talked to most of the significant players about this."

The current National Lottery licence expires this June and the Government will issue a tender for the new licence over the next few months. The licence, which will run for 20 years, has been valued at between €200m and €600m.

"The licence conditions will determine the shape of any consortium or partnership that comes together to run the licence," said Whelan.

"We've been managing this licence for over 25 years so we know the market."

The National Lottery is one of the State assets the Government has decided to sell to raise money for the country. Earlier this month, the Dail passed the law which gives the green light to the sale of the Lotto licence.

The winner of the licence is expected to pay a major upfront fee to the Government – part of which has been earmarked for the new Children's Hospital of Ireland.

If successful in its joint bid for the new licence, An Post does not envisage paying anything towards this upfront fee, according to Whelan. Any partner hooking up with An Post, therefore, would be putting forward the finance for the deal to run the Lotto.

In its annual report, which was published last week, An Post said it "looks forward to participating in the National Lottery Licence bid process".

An Post made a loss of €17.5m last year – its first trading loss since 2003 and down from a €2.2m profit in 2011, according to the annual report. An Post said the "single largest contributing factor" to this loss was "the unprecedented decline in traditional mail – largely driven by the economic crisis".

Another 1,300 jobs will be cut as the company seeks to cut costs.

Irish Independent

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