30.10.

2018
PARLIAMENTARY QUESTION

B/936

The Honourable Second Member for Vacoas and Floreal

(Mr Baboo)

To ask the Honourable Prime Minister, Minister of Home Affairs, External

Communications and National Development Unit, Minister of Finance and
Economic Development –

Whether, in regard to the Lottotech, he will, for the benefit of the House,
obtain information as to the reasons for the drawing thereof twice a week?

REPLY

Madam Speaker,

I am informed that, following a Request for Proposal issued by the

State Investment Corporation in March 2008, Lottotech was retained as the
preferred bidder to operate the Mauritius National Lottery. Accordingly, on
03 April 2009, a Shareholder's Agreement was signed between Lottotech
and State Investment Corporation, thus making the latter a shareholder of
Lottotech as the promoter of the project. Subsequently, Lottotech applied
for a licence to operate the Mauritius National Lottery based on its
proposals for five game categories. On 16 April 2009, the Gambling
Regulatory Authority issued to Lottotech the Mauritius National Lottery
Operator Licence. However, Lottotech was authorised to operate only two
games categories namely, one weekly Lotto 6/40 game and the instant
scratch cards known as cartes à gratter.

Lottotech entered a case against Government for breach of the

shareholders’ Agreement. Thereafter, on 30 October 2012, a
Memorandum of Agreement was signed between Government and
Lottotech before the Mediation Judge for the contribution of Lottotech to the
Consolidated Fund to be reduced from an initial 58.01 % to 46.16% based
on the two authorised games.

Madam Speaker,

The Hon. Member will recall that in the 2015 Budget Speech a total
ban on gambling advertisement and instant scratch cards effective as from
July 2015 was announced. As a result of the implementation of these
measures, in 2016, Lottotech entered a case against Government for a
breach of the Agreement signed in 2012. Lottotech claimed a monetary
compensation for the losses incurred or a reduction in the rate of its
contribution to the Consolidated Fund.

On 13 June 2018, a Memorandum of Agreement was signed before

the Mediation Judge of the Supreme Court, whereby Lottotech agreed to
waive all its rights to any claim for monetary compensation and to increase
its contribution to Government from 46.16% to 47.16%. Government, on its
part, agreed to the following:

(i) the operating licence of Lottotech will be renewed for two

consecutive periods of five years up to April 2029;
(ii) Lottotech shall be authorised to operate a second weekly Lotto
6/40 game after consultation with the Gambling Regulatory
Authority; and
(iii) the transfer of the brand name and mark of the Loterie Vert
currently held by Government Lotteries and operated by Lottery
Committee to Lottotech.

2
Madam Speaker,

I wish to inform the House that the Lottery Committee, which is a

body corporate set up under section 86 of the Gambling Regulatory Act
2007, has been making losses which stood at Rs 8.4M and Rs 13.6M in
2014 and 2015, respectively. This year up to the month of May the deficit
was Rs 5.1M. These deficits are being met from the Prize Account wherein
unclaimed funds for winning tickets are credited, when these sums ought to
have been credited into the Consolidated Fund. The Lottery Committee, in
view of its financial position, is no longer a viable concern. During
protracted negotiation, Lottotech agreed to take over the brand name and
mark of the Loterie Vert and to modernise it for a complete turnaround.

Madam Speaker,

With the transfer of the Loterie Vert to Lottotech, the Lottery

Committee will have to wind up. As part of the agreement signed before
the Mediation Judge, Lottotech agreed to employ 44 out of 65 employees
of the Lottery Committee and to pay to each of them a monthly salary no
less than their last salary at the Lottery Committee.

Actions and procedures have already been initiated to give effect to

the provisions of the Agreement signed on 13 June 2018. In accordance
with Rule 13 (3) of the Supreme Court (Mediation) Rules 2010 the
agreement embodied in the memorandum shall be executed in the same
manner as if it were a judgement of the Court by consent of and between
the parties who have signed it.

3
 Subsequently, Madam Speaker, Lottotech, after obtaining the
approval of the Gambling Regulatory Authority, introduced the second
weekly draw on Wednesday 05 September 2018.