Worries Over Potential Sale of SA Lottery

Friday 23 March, 2012 16:26

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Fears that the South Australian government will go ahead with its plans to sell its lotteries commission are becoming a reality.

"The Australian" newspaper obtained a submission made to the state's Treasury which asked for an independent economic analysis of the sale of the SA lottery, amidst fears that jobs could be lost and newsagents could face reduced profitability.

The government, which is desperate for cash, is seriously considering a one-off payment for the lotteries commission instead of hanging onto its annual revenue generator.

The SA government has already started the process by making public its plans to appoint an advisor on the deal, which is estimated to be worth around $350 million.

The submission highlights potential problems that the state could face as a result of the sale.

"In our experience, the sale of NSW Lotteries to a private operator has led to an approximate 75% reduction in staff members," it is written in the submission.

"Given this, a similar experience in South Australia as a result of sub licensing lotteries could lead to as many as 65 jobs being lost and $6 million annually in income lost to the lost SA community."

The submission also outlines concerns of a private lottery operator introducing the sale and marketing of online lottery products at the expense of retail outlets, who will miss out on compensation.

Lottery Retailers Demand Protection

At present, lottery newsagents receive around $29 million in commission from the $400 million of lottery sales in South Australia.

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A sale of the state lottery has the potential to reduce profitability, and retailers are demanding safeguards and compensation.

Treasurer of South Australia, Jack Snelling spoke of his confidence that the industry will be protected after the lottery is sold.

"The government is aware of the federation's concerns and will consider them when developing its preferred transaction model for allocating the sub-license to the private sector," he said.

He is said, however, to be hesitant about imposing restrictions in order to protect retailers, fearing that the sale price could be affected.

A possible buyer for the SA Lottery is Tatts Group, who might be willing to pay the $350 million asking price. Tatts said that a potential purchase presented the group "with an opportunity to further develop its lottery business within Australia."

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