Looking interest,if someone would like read on the...

Looking interest,if someone would like read on the acquisition.
02.04.2010 07:11 AM

Gaming, wagering and lotteries operator Tatts Group Ltd has taken ownership of NSW Lotteries as controversy surrounds the deal that is now subject to review by the NSW Auditor General.

"Tatts advises that completion of the transaction has occurred, and NSW Lotteries is now part of the Tatts group," the company said in a statement on Thursday.

The sale carries with it a 40-year exclusive licence to conduct public lotteries in NSW.

Controversy has surrounded the deal throughout this week.

Tatts was reportedly able to increase its bid from $700 million to $850 million after being told the sale would include the right to retain all unclaimed prizes over the 40-year life of the contract.

A rival bidder, G-Tech, claims other bidders were explicitly told that unclaimed prizes were not part of the deal and would be retained by the government.

The NSW Opposition and the NSW Greens now say, supported by advice from unnamed senior partners of two Sydney law firms, that the sale is illegal, according to reports carried by Fairfax Media on Thursday.

The NSW government on Wednesday had said the NSW Lotteries sale was above board and would proceed.

NSW Treasurer Eric Roozendaal had rejected the suggestion it breached the legislation that allowed the sale because the Act did not include the sale of unclaimed prizes, whereas the winning contract did.

Mr Roozendaal had said the government was advised there was clause in the Act allowing discretion on the matter.

A spokesman for the NSW Auditor-General has said Auditor-General Peter Achterstraat will review allegations of preferential treatment.

Announcing completion of the acquisition on Thursday, Tatts Group said Tatts Lotteries produced earnings before tax, interest, depreciation and amortisation (EBITDA) of $119 million in 2009.

"The acquisition of NSW Lotteries is expected to produce an additional $120 million of EBITDA by 2014," Tatts said in its statement.

A Tatts spokesman said the company would not comment on the various pieces of legal advice reportedly received by the political parties and had nothing to add to its statement other than: "We're looking forward to providing our NSW customers with lottery products for the next 40 years".

Shares in Tatts were one cent lower at $2.45 on Thursday.