Fe Limited (Company) (ASX: FEL) is pleased to advise that Cardinal House Group Pty Ltd (Cardinal House) has entered into binding partnership agreement (Agreement) with Gibraltar-based secondary lotteries provider, Winners Management Limited.
Under the Agreement, Cardinal House’s brand, LottoMania, will offer Australian and International customers the opportunity to enter into major worldwide lotteries and play a different lottery online every day, by purchasing either an individual ticket or by playing one of their new online syndicates, known as Group Play.
Via a lotteries wagering system Cardinal House will offer ticket sales for:
– the EuroMillions;
– the French Lotto;
– American Mega-Millions;
– Germany’s Lotto 6aus49;
– the UK National Lottery; and
– the Austrian Lotto.
Cardinal House intends to offer this product under the Bookmaker and Betting Exchange licence granted by the Norfolk Island Gaming Authority in December 2015, subject to licensing and operational approval.
In the ten-year history of Winners Management Limited, more than half a million winning tickets have been redeemed.
All prizes will be credited immediately to the customer wallet account, available on the LottoMania website (with the exception of the two largest prizes which take up to 48 hours to verify). The customer has the option to decide with their winnings, to either play again or cash out, into their wallet account or another payment method of choice.
Commenting on the opportunity, Cardinal House Managing Director, Paul Carroll said “Traditionally lotteries have relied on distribution through physical outlets, however lotteries easily lend themselves to the online channel, especially as the rapid increase in the use of internet-connected mobile devices allows participants to access the internet more easily.”
“Secondary lotteries are growing in popularity, as indicated by the growth of the UK-based company ZEAL Networks SE (ZEAL) which, through its MyLotto 24 group, offers secondary lotteries based on various European lotteries.”
As stated in the Frost & Sullivan Australia Pty Ltd independent expert report commissioned for inclusion in the Company’s Prospectus dated 23 March 2016, ZEAL achieved revenue of €139 million (A$207 million) from its secondary lottery operations in 2013.
The total lottery market across all channels globally is estimated at US$284 billion (A$378 billion) in sales in 2014, and has increased at a compound annual growth rate of 4.3% over the
Graham Martin, Chairman of Cardinal House, said “part of our expansion plan is to offer our customers the opportunity to purchase a ticket in the world’s largest and most rewarding lotteries. The partnership with a major lotteries provider shows the commitment of the group and underpins the scale of our intentions.”
Further to earlier updates (see FEL announcement dated 1 July 2016) FEL notes that it received a final stop order from the Australian Securities and Investment Commission (ASIC) in respect of its prospectus dated 23 March 2016, as supplemented by a supplementary prospectus dated 22 June 2016 (Prospectus).
The Company is assessing its options including an application for the review of the decision to the Administrative Appeals Tribunal.
On 12 November 2015, the Company entered into a Share Sale Agreement (SSA) for the acquisition of 100% of Cardinal House (Acquisition). Cardinal House and the Company are assessing the future of the Acquisition and advise that changes to the original SSA will trigger the need to seek shareholder approval for the Acquisition and will also require the Company to re-comply with the back-door listing requirements set out in Chapters 1 and 2 of the ASX Listing Rules under a new application.
The Company will update the market regarding the Acquisition accordingly.