» Australian Tatts to Bid for Irish Lottery
Australian Tatts to Bid for Irish Lottery
Friday 27 July, 2012 15:38
Leading Australian gambling group, Tatts, is eyeing the lucrative Irish
National Lottery license which is up for sale reportedly for a staggering sum of
over $700 million.
Tatts has held talks with Irish authorities in the hope to advance its
chances of getting its hands on the Irish license, despite the fact that there
are many other gambling firms in the race.
Talks were held with the Irish Department of Public Expenditures to discuss
its business model recently.
A spokesman for Tatts Australia, Michael Mangos said that the group would be
examining the Irish Lottery's business and examining the direction it will
Success of Irish National Lottery
If Tatts Australia is successful in its bidding, it will be linking up with a
highly successful lottery.
The Irish Lottery had annual sales of nearly $900 million last year, despite
the fact that numbers were down 1.4% due to what the business termed a "very
challenging retail environment."
The lottery will issue a 20 year license to the right operator, and hopes to
make enough money to build a state-of-the-art children's hospital with the
The 25 year old lottery employs over 100 people and sells its products via
3,800 retail outlets. Around a third of the revenue makes its way to good causes
"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," read the Irish
Lottery's annual report last year.
In 2011, online game sales grew by 65%, added the group.
The lottery is currently operated by An Post, one of the contenders for the
20 year license.
Risky Endeavor for Australian Tatts
But while the appeal of earning this 20 year license to operate the Irish
Lottery is obvious for Tatts, some analysts believe that it might be too risky
an endeavor for the group, and Tatts' bid for the Irish lottery may not
be such a good idea.
"With some potential for Irish exit of the Euro, we see too much incumbent
risk for the buyer [Tatts], ie. a EUR exit is likely to see significant currency
deflation which could present the risks of FX translation and potential write
downs," said Mark Bryan, Bank of America Merrill Lynch analyst.
The analyst also didn't give Tatts a high chance of securing the license,
saying: "We view success for Tatts as very remote and expect Camelot (UK) to
secure the deal."