Trading Room home page

Tatts group to run SA lotteries

Market watch top headlines

Australian reports

World reports

Stocks to watch

AVJ, BBG, KMD, MYR, NAB, PSQ,

ADELAIDE, Nov 27 AAP

November 27 2012, 2:02PM

Gaming firm Tatts has paid $427 million to run South Australia's lottery services for the next 40 years, a deal opposition groups say has short-changed taxpayers.

South Australian Treasurer Jack Snelling said the Tatts group had paid substantially more than the government's sub $400m reserve price for the licence to run lottery and keno services from December 10.

He said the deal was good news for the state's budget and would ensure South Australians would have continued access to nationally-offered games including Saturday Lotto, Oz Lotto and Powerball.

"South Australians will continue to be able to play the lottery games they enjoy, the government will continue to receive gambling tax distributions and there are now significant funds that the government can invest in things such as roads, hospitals, schools and infrastructure," Mr Snelling said.

But the South Australian opposition said the government had been forced into the sale by its lack of financial management.

"The $427 million is equal to less than half of this year's budget operating deficit," treasury spokesman Iain Evans said.

Family First MP Robert Brokenshire also believed the sale price was too low and said the government should have taken the proposal to an election before proceeding.

"Family First believes the state government had no mandate to make this sale and should have taken it to the people at the next election," he said.

Mr Snelling said while the government would forgo the annual $20m dividend paid by Lotteries SA, it would still get about $60m in gambling taxes each year from the sale of lottery products.

He said the deal would also ensure the jobs of lottery agents across the state while staff currently employed by SA Lotteries but not required by the Tatts Group would be redeployed to other public service positions.

Tatts chief executive Dick McIlwain said the transaction would immediately boost the company's earnings per share and was a logical expansion of its lottery businesses in Queensland, NSW, Northern Territory, Victoria, Tasmania and the ACT.

"It's a good story for lottery agents and players in South Australia and it will be a good story also for Tatts group," Mr McIlwain told reporters.

Tatts shares were up 6.5 cents, or 2.3 per cent, at $2.895, at 1401 AEDT.

By Tim Dornin