Surprisingly, the Irish Lottery is Up for Sale by Its Current Operator.
When the UK was about to offer a new deal to manage the National Lottery, many expected the Camelot Group to retain its place. But the unexpected choice of Allwyn took Camelot's owner, Ontario Teachers' Pension Plan (OTPP), off guard. In a recent report by "The Irish Times", OTPP is now planning to sell its Premier Lotteries Ireland (PLI) business, even though its concession for the lottery operates for the next 10 years.
Since Ireland awarded the current concession in 2014, OTPP has had a majority stake in PLI. They paid €405 million (US$434.8 million) for the rights to operate the lottery, along with An Post and An Post Pension Funds. Despite its strong performances and a healthy net return last year, OTPP has given no reason for selling the lottery. This sudden decision comes just a month after it handed over Camelot's assets to Allwyn and pocketed around £100 million (US$120.86 million).
Plentiful revenue didn't seem to be the prime motivation for the move. An OTPP update in the same month revealed that the fund brought in a net return of 4% last year, majorly from inflation-sensitive and infrastructure asset classes. Additionally, the 10-year average net return touched 8.5%, giving OTPP a "value added beyond benchmark" of CAD4.4 billion (US$3.21 billion). OTPP has also expanded its reach by launching new offices in San Francisco and Mumbai.
'The Irish Times' tried contacting OTPP about the PLI sale, but they received no response.
Exceptional PLI Performance
PLI has performed remarkably well. In 2021, its earnings crossed the €1-billion (US$1.07 billion) mark - a jump of nearly 15% from the previous year. Operating profits amounted to €25.3 million (US$27.16 million) for the year. As a result of its thriving 2022 performance, the OTPP funded stood fully funded as of January 1, 2023, while there was a provisional funding surplus of CAD17.5 million (US$12.79 million).
Considering PLI's potent performance in 2022, OTPP purchased a 25% stake in Sweetwater Royalties, a firm dealing in base metals and industrial minerals royalties, for CAD221.6 million (US$162.01 million) in cash.
However, earlier this year, OTPP declared a halt to any direct investments in China due to the deteriorating political situation. They didn't, however, rule out having listed securities in China.
The Irish National Lottery Under Pressure
The Irish Times noted that despite losing the UK's National Lottery deal, the organization was still a frontrunner to continue running Ireland's lottery. But Ireland's National Lottery has faced some negative publicity lately, though there's no evidence it was the trigger for the PLI sale.
Last December, an audit by Ireland's Comptroller and Auditor General raised concerns about how unclaimed lottery winnings were being utilized. Around €124 million (US$131.71 million) in lottery winnings earmarked for community projects should have been used in that manner, but some funds were diverted to marketing and business expenses. This prompted calls from the government to tighten control over the operation and improve transparency. The reform efforts are underway.
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