As the United Kingdom prepared to award a new contract to manage the National Lottery, there was a widespread assumption that the existing operator, the Camelot Group, would be kept on. However, the surprise decision to give the operation to Allwyn left the owner of Camelot, the Ontario Teachers’ Pension Plan (OTPP), unprepared. Subsequently, OTPP sold Camelot’s assets to Allwyn and is now considering leaving Ireland.
Reports from The Irish Times state that the OTPP is putting its Premier Lotteries Ireland (PLI) business up for sale, despite the current concession to operate the lottery not expiring for another ten years. OTPP has held a majority stake in PLI since the Irish government awarded it the current contract in 2014, and paid €405 million (US$434.8 million) for the rights to the lottery, along with then-primary operator An Post and An Post Pension Funds.
Despite the lack of a conclusion as to why OTPP has made this unexpected move, it follows the organization’s recent sale of Camelot’s assets, which includes those in the UK and Illinois, to Allwyn for around £100 million (US$120.86 million). OTPP’s performance in the last year was reported as a net return of 4%, due to “strong returns from inflation-sensitive and infrastructure asset classes”, as well as a “value added beyond benchmark” of CAD4.4 billion (US$3.21 billion) and a 10-year average net return of 8.5%.
The Irish Lottery was also performing strongly in 2021, with sales surpassing the €1-billion (US$1.07 billion) mark and recording a year-on-year increase of almost 15%, and an operating profit of €25.3 million (US$27.16 million). As a result of the strong performance, OTPP was “fully funded” as of January 1, 2023, and held a preliminary funding surplus of CAD17.5 million (US$12.79 million), which allowed them to purchase Sweetwater Royalties, a base metals and industrial minerals royalty company, for CAD221.6 million (US$162.01 million) in cash.
Despite this, OTPP have had to scale back on certain investments, such as ceasing direct investments in China due to the political climate, though they still hold listed securities. There is no clear explanation as to why, but speculation has arisen due to the negative press the Irish Lottery has received in the past year. An audit by the Comptroller and Auditor General of Ireland uncovered an issue with how unclaimed lottery winnings were being used, with around €124 million (US$131.71 million) unclaimed that should have been used for community projects. Legislators called for increased oversight of the National Lottery operations, which is still in progress.
When contacted, OTPP did not provide further details about the sale of PLI. The Irish Lottery is now up for sale in an unexpected move by its current operator, leaving many questions unanswered.
