Small businesses face lottery shake-up

Newsagents claim they will be faced with huge losses to their revenue and the value of their businesses if the Tatts Group goes ahead with plans to expand Tatts Lottery product sales from April 2015 to Coles, Woolworths and other large national chains.

When NSW Lotteries was privatised in 2010 a network of 1600 small businesses throughout NSW and the ACT were licensed to conduct the games of Lotto and Lotto Strike, OZ Lotto, Powerball, Instant Scratch-Its, Lucky Lotteries, and The Pools. Tatts Lotteries, a strategic business unit of Tatts Group, a publicly listed company became the name behind these brands.

The privatisation move was accompanied by a five year ‘Agency Protection Period’ during which all existing arrangements with agents were maintained. The Agency Protection Period will expire on 1 April 2015 at which point the protections for existing lotteries agents – such as newsagents – will cease.

Section 41(1) of the Public Lotteries Act states that for NSW Lotteries to enter into a “new agency agreement” the business must be in the premises of a newsagency, a convenience store or a business that is of a kind prescribed by regulation.

However, according to a petition organised by the Newsagents Association of NSW and ACT (NANA) and ongoing meetings with newsagents across NSW and the ACT, the expiration of the Agency Protection Period “is likely to have long-lasting and devastating consequences not only for the existing agencies, but also for the broader local small business community”.

CEO of NANA, Andrew Packham, said “Woolworths CEO Grant O’Brien told media that Tatts had approached Woolworths to sell Tatts lotteries, but that Woolworths are currently not considering taking on Tatts.”

“Newsagents could lose more than 25% of income and Tatts products represents up to 40% of sales turnover and creates high foot traffic for newsagents,” Mr Packham said, “Tatts has shown very little regard for the loss of revenue that the newsagents face under the changes.”

Above: Kevin and Leanne Lynch of Wentworth Falls Newsagency

Several NSW newsagents spoken to by C&I WEEK are concerned over Tatts saying that they will not only lose exclusivity, but will be forced to pay around $25,000 and up to $30,000 for compulsory fitouts to sell Tatts lottery products with no say in placement of the cabinets/displays.

C&I WEEK posed a number of questions to the Tatts group, including “What other businesses meet the description of ‘business that is of a kind prescribed by regulation’?” and “Are there current negotiations in place for a particular supermarket chain to be able to sell lotteries?”.

Tatts group declined to comment saying: “… we will not be making any further comment. The comments made by others on our retail intentions have no factual basis”.

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