Irish Lottery for Sale in Surprise Move by Current Operator

Posted on: March 21, 2023, 09:25h. 

Last updated on: March 22, 2023, 07:05h.

When the UK prepared to issue a new concession to run the National Lottery, many people were confident that the incumbent, the Camelot Group, would continue. The surprise move to give the operations to Allwyn caught Camelot’s owner, the Ontario Teachers’ Pension Plan (OTPP), unprepared. It then sold Camelot’s assets to Allwyn and now plans on exiting Ireland as well.

A display for the Irish Lottery greets consumers in a store
A display for the Irish Lottery greets consumers in a store. The lottery’s operator, Ontario Teachers’ Pension Plan, wants to sell the business. (Image: The Irish Times)

OTPP is selling its Premier Lotteries Ireland (PLI) business, according to The Irish Times. It’s an unexpected move, as its concession to operate the lottery doesn’t expire for another 10 years.

OTPP has held a majority stake in PLI since Ireland awarded the current concession in 2014. It paid €405 million (US$434.8 million) for the rights to the lottery, along with then-primary operator An Post and An Post Pension Funds.

OTPP hasn’t provided a reason for its sudden decision to sell the lottery. The move comes a month after the organization completed its sale of Camelot’s assets, including those in the UK and Illinois, to Allwyn. For those assets, it reportedly earned around £100 million (US$120.86 million).

Revenue doesn’t seem to be a primary motivation. An update by OTPP earlier this month revealed that the fund generated a net return of 4% last year, driven by “strong returns from inflation-sensitive and infrastructure asset classes.”

It also had “value added beyond benchmark” of CAD4.4 billion (US$3.21 billion) as the 10-year average net return reached 8.5%. In addition, OTPP opened new offices in San Francisco and Mumbai. contacted OTPP regarding the PLI sale but did not receive a response.

PLI Performance

PLI has been performing strongly as well. In 2021, its sales breached the €1-billion (US$1.07 billion) mark, recording a year-on-year increase of almost 15%. Operating profit totaled €25.3 million (US$27.16 million) for the year.

As a result of its strong 2022 performance, the OTPP fund was “fully funded” as of Jan. 1, 2023. In addition, it held a preliminary funding surplus of CAD17.5 million (US$12.79 million).

That facilitated the purchase of Sweetwater Royalties, a base metals and industrial minerals royalty company. For a 25% stake in the company, it paid CAD221.6 million (US$162.01 million) in cash.

Earlier this year, the organization said it would stop direct investments in China due to the ongoing political climate. However, it kept listed securities on the plate.

Irish Lottery Under Pressure

The Irish Times cited analysts who indicated that the organization was the odds-on favorite to continue in Ireland, despite losing the UK’s National Lottery.

Ireland’s National Lottery has dealt with negative press over the past year, though there’s no indication that this was the impetus for the PLI sale.

Last December, an audit by Ireland’s Comptroller and Auditor General raised questions about how unclaimed lottery winnings were being used. At the time, there were around €124 million (US$131.71 million) in unclaimed prizes that should have been used for community projects, according to the lottery charter.

The audit, however, found that some of the money was used for marketing and business expenses. That led to a call from legislators to increase oversight of the National Lottery operations, and reforms are still in the works.