Chariot Woes
May was an unlucky month for U.K.-based Chariot's charity lottery, Monday, which gives a portion of its revenues to 70 charities around the country. For starters, the lottery took flack before its first draw for not allowing residents of Northern Ireland to participate. Then, the inaugural draw was postponed for four hours because of extremely high demand. Chariot said the lottery's Web site, PlayMonday.com, had been receiving 2,000 hits a second--four times the expected number--and some players were having trouble logging on to enter. The draw, which was scheduled for 8 p.m. (GMT), was pushed back to midnight and it brought in less than £150,000--significantly less than Chariot's target of £2.8 million a week. Following the disappointing maiden draw, Chariot, planned to carry out a strategic review to stabilize the business. In the few weeks since the first draw, however, Chariot has sold only 1.68 million tickets, while 200,000 individuals registered, raising online around £520,000 in the process for the 70 charities participating in the lottery.
British Newspaper the Independent obtained the financial documents for Chariot showing that the company awarded its directors shares and bonuses worth almost £10 million. Board members have been given shares worth £3.4 million and stock options worth £5.2 million, plus they stand to gain another £1 million a year from a company bonus scheme and an employee incentive plan. Chariot denied the claims.
The company received CPR this week in the form of a £2.5 million cash boost. Deputy Chairman Peter Jones and non-executive Director John Finan have subscribed to a placing of new shares issued at 5p and will together take the executive reins of Chariot, while chairman Tim Holley and managing director Craig Freeman are said to be resigning, along with at least one other executive director, whose identity will only be announced with the details of the fundraising.
UK Lottery Bidding
The U.K. National Lottery Commission last month revealed the terms of the National Lottery's third licensing period. The commission's draft Invitation to Apply (ITA) sets out the near-final details of the bidding process as well as clear guidance on the competition process, its requirements and evaluation criteria. The commission, which regulates the lottery and is charged with the selection of bidders for the next contract, is seeking a licensee to provide a complete solution, including: setting up and running the National Lottery; designing, building, financing and operating the requisite infrastructure and systems; designing, distributing and marketing lottery games; and ensuring a smooth transition of the lottery from the current operations, handled by Camelot, whose license expires Jan. 31, 2009. This time the contract has been extended from seven years to 10 years, with the possibility of further extensions. The bidding process has been extended too; interested parties have five months from the final ITA to put together proposals. Bids from entities based all over the world are welcome, but the licensee will be required to have an office physically located in the United Kingdom and staffed by appropriately authorized personnel. The commission says it will be impartial toward the nationality of the bidder--or whether it is a profit-making or a not-for-profit operator--as long as the bidder can fulfill the statutory objectives and is capable of being regulated in an efficient and effective manner. Lottomatica, Italy's national lottery operator, is said to be in the running, as is a partnership of Intralot, Ladbrokes and Tattersall's. Virgin's Sir Richard Branson, who bid for both of the previous U.K. National Lottery contracts, is expected to bid for a third time, although his inclusion is dependent on whether he is satisfied that the bidding process is fair. Camelot has also reiterated its desire to bid for a third license.
Branson's Peoples' Lottery is planning to raise concerns about the way the next license is being awarded before next week's deadline for application. Simon Burridge, who will lead the People's Lottery if it decides to bid, said the bidding process is complicated and expensive and that the group is disappointed with the amount of detail required from a company that might never exist. Several other potential bidders have reportedly complained that current licensee Camelot has an unfair advantage because of its existing infrastructure and 12 years of experience.
Invasion of the Protesters
A group of six protesters calling themselves "Fathers 4 Justice" invaded the live broadcast of the U.K. National Lottery May 20 draw, temporarily delaying the £17 million draw. The director cut to a shot of the National Lottery logo, and BBC announcer Alan Dedicoat was forced to improvise a commentary while the protesters were removed from the studio. Fathers 4 Justice is a group that protests court-imposed separation of children from their fathers as a result of divorce. The incident is under investigation.
Intralot Denial of Mobile Ambitions
Greek lottery company Intralot, which plans to open a corporate headquarters in Melbourne to tap into the Australian and Asia-Pacific markets, is denying rumors that it plans to offer betting via SMS. According to an Australian newspaper, the company applied for a lottery license in Victoria and plans to offer money games and lottery tickets through mobile phones, but Intralot Director Tony Sheehan said SMS betting was only a minor part of their proposal and it was banned under gaming laws. Intralot has selected global gaming network Terraplay's "MOVE" solution to enable optimized communication over mobile telecommunication networks to Intralot's B-On gaming platform. Terraplay's MOVE system is designed to support all types of multiplayer game in the mobile arena and Intralot's B-On platform features multiplayer mobile and PC games of skill, knowledge and chance combined with betting, tournaments and instant tickets.
Good Fortune for Sazka
Czech lottery and betting agency Sazka netted US$26.1 million in the first quarter of 2006, an increase of 35.4 percent over the same period in 2005. Part of the profit, $13 million, will be transferred to the sports associations that are its shareholders. Sazka has reduced its debt from a bond issue by more than 10 percent, or $24 million, in the last 12 months.
EC Okays GTECH Acquisition
The European Commission has approved Italian lottery company Lottomatica's acquisition of its competitor, U.S. gaming company GTECH, under the EU Merger Regulation. The Commission decided that the deal would not significantly impede effective competition in the European Economic Area or a significant part of it. Lottomatica last week reported a drop in wagers for April, amounting to 529 million euros, compared with 748.3 million euros in March 2006 and 545.6 million euros in March 2005.
Spain's Little Rasca
Organización Nacional de Ciegos Españoles (ONCE), the Spanish organization for the blind, partially sighted and people with other disabilities, on May 15 launched "Rasca de la ONCE," an instant lottery that will offer prizes that can be claimed on the spot. The lottery will cost 0.50 euros to play and will pay prizes ranging from 1 euro to 3,000 euros. Rasca de la ONCE is the first instant lottery to be made available throughout Spain.
FLUXX Obstruction
The German Federal Competition Authority (FCA) has sent a written warning to the country's lottery and pools organization, ordering it to desist from obstructing the establishment of the over-the-counter sales network of German gaming software provider FLUXX AG. The obstruction, the agency contends, constitutes an unlawful restraint of competition in the handling of betting stakes. The Bonn-based authority further ruled that the "regionalism principle," whereby lottery companies only offer lotteries and sports betting in those federal states for which they hold a permit was likewise found to be at odds with antitrust law. The FCA said this constitutes an unlawful zoning practice that seeks to obstruct competition between the lottery companies.
Rehab Milestone
Rehab Bingo, a fundraising activity of the Rehab Group, an Irish charity providing training, employment, health and social care services to people with disabilities and those who are socially marginalized, has continued rapid growth from a successful 2005 launch by surpassing the 2 million euros (£1.37 million) payout mark in its first six months of operation. Rehab Bingo is a division of Rehab Lotteries Ltd, based in Dublin.
IGT Enters Brazilian Market
International Game Technology (IGT) is opening its first operation in Brazil, in the state of Pernambuco, pending final approval from the Regulation Agency of Pernambuco (ARPE). The project includes the introduction of a thousand terminals of virtual scratches over nine months, with hopes of registering a US$175,192,712 collection annually, less remunerations. IGT will reportedly have to pay ARPE US $9.19 million a year. ARPE has already published the resolution for the operation of the lottery, but full authorization has not been granted because technicians from the Center of Advanced Studies and Systems of Recife (CESAR) are evaluating the security of the systems and the transparence of the new type of online lotteries. Only after the conclusion ARPE will decide if it authorizes the installation of IGT equipment or not. Meanwhile, IGT is in talks with the Football Federation of Pernambuco (FPF) about the sponsorship of the league's championship. IGT has to offer at least US $5,255,781 over five years to obtain the rights to use the local clubs' shields in its electronic game.