Turkish National Lottery Goes Private With New Games Expected to Hit the Market

Turkish national lottery will be privatized following a tender won by Net Sans-Hitay consortium.

Well, it’s official, the Turkish national lottery, Milli Piyango, goes private as a tender for 10 year of operation was concluded last week under Turkish gambling laws. Previously a state-owned monopoly, the lottery will now be run by Net Sans-Hitay, a Turkish consortium, and their American partner – Scientific Games.

The price the partners paid to operate the lottery and possibly some online casinos in Turkey, was $2.76 billion, but some criticize the tender for setting up the price below the real market value. According to pre-tender reports, the lottery business earned TLY 1 billion (almost half a billion US dollars) for the state coffers in 2012 alone.

The buyers and the future

Turkish national lottery, Milli Piyango, will be privatized to a consortium partnering with Scientific Games

• The tender was carried out in full compliance with Turkish gambling laws

• Net Sans-Hitay has won the rights to operate the lottery for 10 years

• Besides lottery, they consortium will be able to introduce new games

Hitay owns the pioneer online gambling platform in Turkey – Bilyoner, while Net Sans Holding has a wide selection of gambling and Turkish gaming business under their wing. No need to introduce Scientific Games – it’s a renowned software solutions firm catering to lotteries and gambling operators worldwide.

The privatization’s criticism is quite understandable: experts agree that state coffers could’ve earned much more over the next 10 years of the tender’s validity, than the price the partners paid. Milli Piyango’s sales revenues almost doubled in five years since 2007 to a nice figure of TLY 2.28 billion. According to modest estimates, if the lottery wasn’t privatized, it could have earned the state around TLY 10 billion ($4.58 billion) during the next ten years.

However, there’s another camp of experts, saying the state can still be able to maximize its profits thanks to much better management the private owners will exercise. State coffers will still be filling up with lottery sales money, as the tender winning partners are only entitled to 25 percent share of the annual revenue.

Turkish gaming figures

According to Privatization Administration’s data, the revenue of state coffers from all games of chance in the country, including the lottery, and money from those who bet on sports in Turkey, grew from TLY 7.24 billion in 2010 to TLY 11.3 billion in 2012. Milli Piyango’s share in this was 20 percent in 2012, while sports betting – Spor Toto enjoyed the biggest share – 54 percent. Horse racing betting system, Turkiye Jokey Kulubu had 26 percent of the overall gaming revenue.

Privatization in Turkey

Gambling sector is not the only one to be privatized in Turkey in recent years. The state has already profited largely from selling off its stake in some of the biggest companies in the energy sector. The country is now focusing on more profitable sales, as some of the tenders brought in cash below expectations.

The Net Sans-Hitay big is still to be approved by the country’s privatization and competition boards, and a final high court approval is also needed. During the tender process, the consortium has beaten offers from two rivals: Czech investment groups working with Italian Gtech S.p.A., and another Turkish consortium ERG-Ahlatci.

The Turkish government even had plans to abandon the attempt to privatize Milli Piyango earlier in January this year. This was due to growing political tension in the country. And back in 2009, Turkey has already scrapped a previous tender to privatize the national lottery as a whole, after the two bidders failed to collect enough funds to cover the $1.6 billion minimum price.

Not just the lottery

The winning consortium will gain rights not only to the lottery, but to design and bring out new games of chance on the market as well. This is regarded as one of the easiest ways to attract more customers, giving the gaming sector in Turkey a much needed boost.

Once the new games are added, the lottery is expected to increase sales and thus pay off the consortium the money they’ve spent on the tender. Moreover, now the lottery draws can be held every weekday instead of 4 times a week, provided the winning consortium wants it this way.

Milli Piyango is a huge organization with 23 representative offices across the country, and over 15,000 sales points in Turkey. There are currently six online gambling sites offering Milli Piyango tickets to online gamers, this number is expected to grow following the sale.