Developments in Turkey - National Lottery to Privatize, I-Gaming Not Part of the Equation

14 June 2004

For months and months, all eyes in the international gambling industry have focused on the forthcoming privatization of the Turkish national lottery, Milli Piyango.

With a population of 75 million, a turnover of TRL 1.1 quadrillion (US$734 million) in 2003 and a net profit rising by 58.4 percent, it is clear to see that here is a huge crown jewel to be obtained.

The tender has been announced several times, with the last announcement coming in May 2004. To date, however, no tender has been arranged.

Tobias Arnoldussen, a spokesman for the law firm AKT in Istanbul, said proceedings for the tender have gone on for a while. AKT has designated three legal officers to its "Lottery Privatization Group." The three are engaged daily in all the aspects of the privatization project,

"The tender commission has been formed, and currently the commission is still working on the project," Arnoldussen explained. "On the other hand, it is not possible to say when exactly the tender will take place. As per the oral information we obtained from the General Directorate, the tender may be announced in June, however, there is no certainty at the moment. The disagreement between the General Directorate and the Privatization Administration, might cause further delay.”

An Interactive Component?

Major lottery interests--such as Camelot, GTECH, OPAP, Intralot, Lottomatica and others--are in the meantime wondering whether Internet, mobile phones and other interactive media will be allowed by Milli Piyango's future operator.

"The Tender conditions can only answer these questions conclusively," Arnoldussen said, "but as things are looking now, it is our opinion that it is unlikely that the winning party is receiving the rights to Internet and mobile phone gaming or to introduce new products. Internet and mobile phone gaming are as yet illegal in Turkey. . . . The licenses the winning party will obtain are likely only to concern the games that exist now. It is unlikely that these licenses will grant these rights to the winning party.

“In Turkey, other than small-scale things like the electronic signature, there is not much specific Internet-aimed legislation. A few attempts at control of the Internet met with public resistance and have been called off. Telecommunication laws in part also cover Internet activities.”

Turkish newspaper Hurriyet recently reported that Milli Piyango's general directorate has expressed worries concerning online gambling, which has increasing in Turkey via sites operating from abroad. It is the general directorate’s opinion that the operating of any games of chance falls under its responsibility, and therefore, the operating of these sites should be blocked.

The general directorate has decided to step up its efforts against such sites and is reviewing its legal options with its lawyers. One suggestion is blocking sites using some sort of "electronic wall," so that they become unreachable to potential users. Implementing such a measure, however, would require a court order.

Another option under discussion is obtaining the credit card numbers of online gamblers and having the cards cancelled.

Click here to view further details on the Milli Piyango privatization.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.