THE NATIONAL LOTTERY’S new operator has identified its ability to deliver on promises made while bidding for the license as one of the key risks to the business.
Accounts recently filed for Premier Lotteries Ireland (PLI) showed the company lost €17.4 million for its first 19 months in operation – although that figure included just one month of ticket sales.
The company, which is backed by the Ontario Teachers’ Pension Plan and An Post among others, paid €405 million early last year for its 20-year licence to run the National Lottery.
PLI was set up in May 2013 but only started trading on 30 November last year after a transition period.
In 2014 it delivered total lottery sales of €56.8 million and gave out €32.7 million in prizes – above the 50% share required under its license.
The company also delivered €15.7 million in funding to good causes for the year under its license agreement, which requires the lottery operator to hand over about two-thirds of its revenue after prizes to charity.
“Following a successful transition of operations from An Post National Lottery Company, PLI is focused on growing sales, offering players a wide choice of games and maximising the amount raised for good causes,” it said in the filings.
“This will be achieved through the ongoing development of our games and the development of our online channel.
The key risks facing the company include the company’s significant reliance on its IT and telecommunications infrastructure and retailer operations, the delivery of promises made in its bid for the license and the impact of general economic factors on the company.”
Technical glitches
PLI suffered another embarrassing outage with its terminals on Saturday, just hours before that night’s jackpot draw.
The latest glitch followed a major service disruption in February involving the 3G connections for lottery terminals, which resulted in the draw being cancelled for the first time in its history.
Retailers who sell Lotto tickets have since complained PLI was making ‘savings and shavings’ on the draw to maximise its return.
Its chief executive, Dermot Griffin, earlier this year refused to scotch rumours it planned to add numbers to the draw to make it less likely punters would win, or that it would raise ticket prices to lift incomes.
PLI’s operating loss was €5.4 million last year, while it spent some €6 million on “transition costs”. Another €14.1 million went on finance expenses like loan interest.
The accounts showed it had long-term debts of €196.2 million, due to be repaid over the next 5 1/2 years.
It also had separate loans worth €168.8 million to its owners, the bulk of which was due to the company’s ultimate parent, the Ontario Teachers’ Pension Plan. These were all returning 9% interest to be repaid by the end of 2034.
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