NSW Lotteries Sales Transaction
The Auditor-General of New South Wales, Mr Peter Achterstraat, today tabled his review of the Government’s sale of NSW Lotteries. The review was designed to address concerns raised regarding the sale process.
No financial imprudence or waste found
Mr Achterstraat found no evidence to indicate that the successful bid was inconsistent with the rules, or that there was waste of public resources or financial imprudence with the Government’s sale of NSW lotteries in early 2010.
He has some concerns in relation to:
the State advising prospective bidders that “proponents could not rely on any statement by or on behalf of the State during the process”
the absence of documentation supporting some key decisions.
The estimated retention value of NSW Lotteries was $510 million. Bidders were invited to make a “preferred transaction structure” bid and an “alternative transaction structure” bid.
Three of the bidders included an up-front payment in excess of the estimated retention value in their bids under the government’s preferred transaction structure. The successful bid was an alternative transaction structure bid involving an upfront payment by the successful bidder of $850 million and a cash and asset extraction of approximately $161 million.
The successful bid was the only bid to include a proposal for any retention of future unclaimed prizes.
Reliance on representations
“Official documents and statements from officials involved in the sale clearly said that unclaimed monies were intended be transferred to the State”, said Mr Achterstraat.
“However, bidders were also informed that proponents could not rely on any statement by or on behalf of the State during the process and that the Minister retained discretion under the Public Lotteries Act 1996”, he added.
The State also had legal advice that there was no legal impediment that precluded the bidder from retaining unclaimed prizes.
“Where the Government chooses to conduct a process on the basis that ‘proponents could not rely on any statement by or on behalf of the State during the process’, this point must be continuously reinforced to proponents”, Mr Achterstraat said.
Limited documentation available
Detailed documentation on the value of unclaimed monies was not produced.
“However, I found no evidence to indicate that the value of unclaimed prizes was not properly assessed, based on the assumptions made,” Mr Achterstraat said.
Please contact Barry Underwood, Executive Officer on (02) 9275 7220.