Australia’s The Lottery Corporation has secured a huge contract with the Victoria government, but the major commercial win is being overshadowed by some political scrutiny.
The company revealed yesterday (5 May) that it had signed a 40-year contract with the Victorian government to continue operating official government lottery products in the state.
This contract will be in place until 2068. While Australia does not have a national, federal lottery, The Lottery Corporation may as well be the national lottery operator in the country, with its closest contract expiry date being in 2050.
As well as Victoria, it operates lottery products under state government contracts in New South Wales (NSW), South Australia, Queensland the Capital Territory and Tasmania. The only other state lottery, Lottowest of Western Australia, is run directly by the government while also maintaining a deal with Brightstar.
Wayne Pickup, Chief Executive Officer of The Lottery Corporation, said: “Typically, almost one in two adult Victorians play our lottery games each year – some of which are among Australia’s most recognised and iconic brands.
“Today’s licence extension allows The Lottery Corporation to continue to responsibly deliver safe, engaging and sustainable entertainment to Victorians for many years to come, while supporting a vibrant lottery retail network underpinned by small businesses, and generating material lottery duty revenue to fund state and community services.”
A big win … but controversial
The 40-year contract cements The Lottery Corporation as the biggest lottery business in Australia. This is an impressive achievement since the company is only four years old – though it did get a pretty good head start, in all fairness.
The Lottery Corporation was created by the spinoff of Australian gambling market leader Tabcorp’s Tatts business, which ran lotteries and keno. Tabcorp would continue operating as a retail and online betting and gaming giant.
As well as securing a plethora of state contracts, the Lottery Corporation has been busy with structural changes. Pickup took over the role of CEO last year, and the firm has since shaken up leadership up at the departmental level.
From a commercial and financial standpoint, the ASX-listed business looks set – five lucrative state lottery contracts for the next couple of decades. However, like many other Australian gambling stakeholders it has not escaped scrutiny.
Shortly after the Victoria deal was announced, the state opposition spoke with Sky News Australia to air concerns about a potential ‘secret deal’ made between The Lottery Corporation and the Labor government of Jacinta Allan.
“This is a deal that should have been done for the next 10 years, but instead we’re seeing a deal done for 40 years,” said Jess Wilson, leader of the Victorian Liberal Party and leader of the Victorian opposition.
“There are serious questions for Jacinta Allan to answer here. Why did this not go out to a public tender? Why is this such a secret deal?
“We know that the company (which) has been given the deal is a donor to the Labor Party. There are serious questions to answer about whether taxpayers have got value for money, but also the fact that this deal is clearly just a prop up the budget bottom line.”
The Australian Greens, meanwhile, have accused the Allan government of making ‘dodgy deals’ with The Lottery Corporation.
Both the Liberals and Greens argue that Allan’s government has signed a deal with a commercial entity that has previously donated to it, with the intention of using the contract to shore up state budgets.
The Greens in particular argue that Allan’s government should instead tax Australia’s large gambling industry.
“If this Labor Government had any integrity and guts they would properly tax the gambling corporations to pay for the things we need, not do dodgy deals with them,” said Ellen Sandell, Leader of the Victorian Greens.
“Jacinta Allan’s budget was good for Labor’s corporate donors, not for everyday people. Labor just locked Victorians into a half a lifetime deal with a gambling corporation so they can receive kickbacks from their gambling company donors.”