State seeks advisers for €600m Lotto licence sale
Camelot and Tatts potential buyers
The Government is seeking advisers for the sale of the €600m licence for the National Lottery by the end of August. Last week, Brendan Howlin's Department of Public Expenditure put out the role to tender.
"The draft heads of a bill are expected to be considered by Government very shortly. Once this legislative procedure is initiated, the way is paved for a new National Lottery Bill being published towards the end of September," according to Mr Howlin's department.
The sale of a 20-year licence to operate the lottery has attracted a price tag of between €400m and €600m -- which has been earmarked for funding the new children's hospital, which is to be built at an as yet undecided location.
Camelot, which is owned by the Ontario Teachers' Pension Plan, is seen by observers as the front-runner to land the potentially lucrative operator's licence.
But they are not alone. Tatts Group, the Tasmanian gambling firm, has also held talks with civil servants in Mr Howlin's department over buying the licence.
Italy's Lottomatica's subsidiary Gtech Corporation, and incumbent operator An Post are also in the frame for the licence which kicks off in June 2013.
The sales process is now being handled by NewEra -- the quango set up to manage State disposals and reinvest the proceeds.
However, some market sources have questioned whether the licence could raise as much as the Government hopes. The €600m up-front payment for the licence could end up being reduced or paid in installments.
Mr Howlin has said that the percentage of money going to retailers and to good causes will not be changed under a new licence agreement, making the lottery potentially less attractive to private-sector buyers.
There are also a number of blurred issues which need to be clarified before the sales process kicks off in earnest.
These include the online regulation of gambling and lotteries as well as the future ownership of the lottery's assets and staff employment.
"Details regarding the competition process, including the structure and nature of any potential transaction, will of course be influenced by the view of the advisers to be appointed in September," according to the department.
"Departmental officials have held meetings and conference calls with parties who have expressed an interest in the lottery licence; these offer the opportunity for potential bidders to convey feedback on the announcements to date."
Last month, Bank of America analyst Mark Bryan told investors that Tatts was unlikely to go hell for leather in trying to bag the licence.
"With potential for the Irish exit of euro, we see too much incumbent risk for the buyer, as a euro exit is likely to see significant currency deflation which could present the risks of FX translation and potential writedowns," he said in a note to clients.
Sunday Indo Business