Friday, April 10, 2009


Yahoo News, AAP, 9.4.09

NSW will offer an exclusive, long-term licence for a private operator to run the state's lotteries in a move analysts say will pump about $600 million into state coffers.

Treasurer Eric Roozendaal expects the licence will last about 30 years and says private sector interest in running NSW Lotteries is already strong.

The state-owned corporation operates Lotto, Oz Lotto, Powerball, the 6 from 38 Pools, Instant Scratchies and Lucky Lotteries in NSW.

Under the planned arrangement, the state would continue to reap its annual duties of $300 million, but would lose its $50 million a year dividend payments.

Mr Roozendaal would not put a figure on how much he believed NSW would gain from the successful private operator, but expected the tender process to start in the second half of this year.

When the NSW coalition took a policy to sell off NSW Lotteries to the 2007 election, it was expected it would generate about $800 million.

A figure of about $1 billion was suggested last November when a possible sell-off or lease was flagged in the state government's mini-budget.

CommSec gaming analyst Craig Shepherd said the length of the licence being offered meant both figures were probably over the mark, and $600 million was a more likely bet.

"The fact that it's a 30-year licence, compared to longer licences in Queensland, means that the price comes down a bit, so the expectations around that $800 million are reduced," he told AAP.

Mr Shepherd said he saw no real problem with the sale's timing, despite the current global economic downturn.

He expected most gaming companies would take a close look at the government plan, with the market viewing Tatts Group as the front runner to secure the licence.

Tatts operates in five states and territories and is the only non-government lottery operator in Australia.

Mr Roozendaal said there was no public policy reason for the state to run NSW Lotteries and money from the licence deal could be redirected into areas such as health and education.

He said it was too early to speculate on whether lottery products could be sold in service stations and supermarkets, not just newsagencies.

The Australian Newsagents' Federation said it would continue consulting with the government ahead of any licence being issued to ensure its members were protected.

Opposition treasury spokesman Mike Baird said the coalition still supported privatising NSW Lotteries, but the government's timing was wrong.

"We've got one simple message for Eric Roozendaal and that is you are going stark raving mad," Mr Baird told reporters.

"To sell any assets at this time is complete nonsense."

Mr Baird said any asset going to market was not going to deliver value for taxpayers and would be nothing more than a firesale.