A consortium of UK National Lottery operator Camelot and An Post, the state-owned provider of postal services in Ireland, has been named as the preferred bidder for the licence to run the Irish National Lottery under a new 20-year contract reported to be worth €405 million ($542.7 million).
According to The Irish Times newspaper, the bid was submitted through the Premier Lotteries Ireland Consortium comprising An Post, its pension funds and Camelot’s parent company, the Ontario Teachers’ Pension Plan.
One of the significant features of the new agreement is that the licensee will have greater flexibility to operate online. The business currently makes less than 3% of its revenue from online operations.
Talks on finalising the licence terms between the consortium and the Department of Public Expenditure and Reform will begin shortly and are expected to be concluded by the end of November. The Irish government is selling the lottery’s licensing rights in an effort to raise much-needed funds for its struggling economy.
The €405 million offered by Premier Lotteries was significantly higher than industry estimates of between €250 million and €300 million that emerged during the bidding process.
However, the agreed figure does fall some way short of the €500 million touted by some politicians.
The two other bidders involved in the process were global lottery and gaming companies, US-based GTECH and Australian set-up Tatts.
The €405 million fee will be paid in two instalments; the first when the deal is signed later this year and the second when Premier Lotteries takes over the running of the licence in October 2014.
Premier Lotteries will have to pay 65% of its gross revenues to good causes.