A consortium that includes US gaming equipment maker Scientific Games Corporation (SGC) has won the rights to operate Turkey’s national lottery. Turkey had set a June 27 deadline for bids to privatize operation of its Milli Piyango lottery business, the rights to which were awarded this week to the Net-Hitay consortium, which includes SGC, Net Sans Holding and Hitay. The bid still awaits approval by Turkey’s privatization watchdogs and the courts.
Net Sans is a division of Net Holding, which has a 30-year history of casino management under the Merit Casinos brand. Hitay is half-owner of Bilyoner.com, Turkey’s original online sports betting site. (Greek betting outfit Intralot owns the other half.) The consortium’s bid of $2.755b was the highest received for the 10-year license, proving once and for all that money talks. Previous privatization efforts in 2009 were called off after no bids met the $1.6b reserve price.
Net Sans-Hitay will earn 25% of annual lottery revenue (after VAT) and 28% of other gross revenue. In addition to operating the lottery’s current four games and scratch card tickets, the consortium will have the ability to introduce new lottery products, provided the National Lottery Administration deems them acceptable.
News of the winning bid has prompted critics to complain the government has sold itself short. Critics told Today’s Zaman that the government could have expected TL 10b ($4.6b) in profits over the next decade without privatizing the lottery operations, while privatization supporters say the introduction of new products will spur sales and thereby increase the government’s take.
In 2007, Milli Piyango generated sales of TL 1.53b ($721m), which rose to TL 2.28b ($1.1b) in 2012, of which nearly TL1b ($471m) went directly into the government’s coffers. Total sales of all lottery games of chance in 2012 came to TL 11.3b ($5.3b), with the Spor Toto sports betting product accounting for TL 6.1b ($2.9b) and the Turkiye Jokey Kulubu horserace betting system adding TL 2.9b ($1.4b).
Losing bidders included GTECH, which is probably just as well given the company just announced a $6.4b acquisition of International Game Technology, and Czech firm Emma Capital, whose Emma Delta subsidiary acquired the Greek government’s stake in the OPAP betting monopoly last year. Turkish Lottery Holding was another early entrant but withdrew its bid early in the running.
