Irish lottery may be privatised

Irish broadcaster RTE reports that the Irish state’s lottery is on a list of assets that could be sold by the debt-burdened government.
Last year the company, which employs 100 people, raised Euro 770 million from the sales of lottery tickets and other products, awarding Euro 420 million in prize money after deducting admin costs of Euro 108 million, and donations to charitable and sports causes of Euro 244 million.
Ministers have not yet been presented with firm recommendations on the assets for sale, and the final decision kis expected to be the subject of intense political debate. In the meantime, the assets will be valued as a starting point.
The Finance ministry has so far declined to comment on the report, but RTE asserts that the assets sale was recently discussed at the government’s Economic Management Council, which is made up of Public Expenditure Minister Brendan Howlin, Minister for Finance Michael Noonan, Tánaiste Eamon Gilmore and Taoiseach (PM) Enda Kenny.
“Selling lotteries is nothing new – Britain’s lottery is run by Camelot, which donates 40 percent of sales to good causes,” RTE reports.
Meanwhile, equally embattled Spain is in the process of selling off its lottery company, Loterias, which could raise Euro 7 billion for the heavily indebted government, The Guardian reports.
The Euro 25 billion privatisation of Spain’s national lottery – including the famous El Gordo, or The Fat One – begins in London on Tuesday, according to the UK newspaper.
“The early marketing for the offer of about 30 percent of the state-owned Loterías y Apuestas del Estado – which is set to be Spain’s largest ever stock market listing by raising up to Euro 9 billion – is to begin with the arrival of chairman Aurelio Martinez, finance director Luis Palacios and chief operating officer Marcelo Ruiz to target City investors,” says the Guardian.
“The float is being led by a quartet of bulge bracket banks – UBS, Credit Suisse, JP Morgan Cazenove and Goldman Sachs, along with BBVA and Santander of Spain – to be joined by a host of rival City firms including Citi, Deutsche Bank, Morgan Stanley and Barclays which also have their names on the ticket in smaller roles.”
Loterías is understood to be paying fees of about 1 percent, considerably less than the City norm due to a combination of the business being state-owned and bankers, anxious for some of the action, offering deals in a lean environment.
The Spanish national government has pushed the London listing as part of a privatisation programme that includes a planned sell-off of part of the state airports authority in order to ease Spain’s financial and economic problems.
There are fears Spain may need an international bailout similar to those given to Greece and Ireland. The government is also believed to be planning to sell off a further 19 percent of its lottery company in the future.
Like similar operations in France and Britain, Loterías runs EuroMillions, which regularly offers hundreds of millions of Euro in prizes, but its most famous payout is the El Gordo, the world-record-breaking prize fund in Spain’s 199-year-old Christmas lottery which lst December paid out some Euro 2.3 billion.
“The company could become the world’s largest listed gaming company by value, if the offer is successful, and it plans to pay investors a yield of about 6 percent on a monthly basis following admission,” The Guardian estimates.
Loterías reported a profit of just under Euro 3 billion in 2009, and controls 77 percent of that market from which it derives 95 percent of its revenues. It also operates sports betting businesses and pool betting operations.
The company is now seeking approval for its offer document later this month, before pricing the shares in October in order to float the business ahead of Spain’s November election. Of the shares being sold, 40 percent will be marketed to institutional investors with the remainder being sold to Spanish retail investors.

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