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WA Government May Ban LottoLand After Lotterywest’s Sales Slump

Tue, Sep 19, 5:09pm by Staff Writer

As part of its most recent financial filings, covering the 2016-17 fiscal year, Western Australia’s state-owned Lotterywest reported $827 million in sales – down $62 million for a 7.7 percent year-on-year decline.

Meanwhile, the foreign-owned Lottoland – a Gibraltar-based company which allows players to wager on the outcome of worldwide draws, rather than the actual lotteries themselves – is reportedly raking in more than $1 million per week after launching in January of last year.

To explain the drastic reduction in statewide lotto sales, Lotterywest chairwoman Heather Zampatti referenced the rise of wagering markets like Lottoland:

“The rise of online sports betting and synthetic lottery providers also made for a challenging year.

As a result, Lotterywest sales were down 7 per cent on the previous financial year, consistent with national lottery industry trends.”

In response to the sales plunge – which led to a $16 million reduction in Lotterywest’s annual “community contribution” to local causes – Premier Mark McGowan announced that Western Australia’s government would begin work on legislation targeting Lottoland:

“Organisations like Lottoland give nothing back. And that’s not acceptable to me.

Lotterywest is the best organisation of its type in Australia, probably the world. It makes a big return to community groups and the broader community. We want to make sure it continues to do that.

All that Lottoland does and those sorts of organisations, is suck money out of here, send it elsewhere and not give anything back.”

Dean Nalder, who serves as Shadow treasurer for the state government, issued a statement echoing Premier McGowan’s praise for Lotterywest:

“[Lotterywest] provides a lot of funding back to the community for charitable organisations and community grants.

I believe the whole online gambling, including Lottoland, needs to be looked at as to what contribution they are making back for the people of Western Australia.”

When the Northern Territory Racing Commission (NTRC) granted Lottoland a license last year, the company became the first of its kind to conduct lottery draw wagering in Australia. Lottoland’s rollout was timed to coincide with a record-breaking $1.6 billion Powerball jackpot in America, offering Australians an opportunity to purchase number-sets in the historic draw.

To comply with American and Australian laws restricting international lotto sales, Lottoland doesn’t allow players to participate in games like Powerball. Instead, players hope their number-sets match those from the real draw, at which point Lottoland’s €100 million (AUD $150 million) insurance policy underwritten by Insurance-Linked Security kicks in to pay the equivalent jackpot sum.

Lottoland has enjoyed immense success across Australia since its launch, but the government in South Australia quickly moved to ban the company and similar services.

In his public statement, Premier McGowan made it clear that Western Australia would follow South Australia’s prohibition plan:

“South Australia has outlawed Lottoland, we’re going to do that as well.

The drafting process will take some time but we are keen to protect Lotterywest.

Luke Brill, chief executive officer of Lottoland, spoke to local media outlets to refute the government’s claims of insufficient tax payments, pointing out that his company is licensed in the Northern Territory:

We pay gaming tax in the Northern Territory, we pay GST, we pay corporation tax as well so we contribute like any other bookmaker.

At the moment, there’s been no infrastructure to pay additional tax.”

Even so, Brill sought to mend fences by stating that Lottoland fully supports the government’s recently announced proposal to introduce a point-of-consumption tax for online wagers placed in the state:

“We understand that we can be contributing more to the community and that’s why we are fully behind the point of consumption tax,” he said.

It means 15 per cent of our gross profit will go back into the WA community once it comes into effect, which is obviously what we want.

So any smear campaigns to say we’re avoiding tax it is just simply not true.”

Brill also objected to the claim that Lottoland’s product “cannibalised” local lotto services like Lotterywest:

“The majority of the players that play at Lottoland didn’t actually play the traditional lotteries.

A lot of the younger generation had never been to the newsagents and purchased a lottery ticket, they just didn’t find it appealing.”

In January of this year, reported that Lottoland was bringing in more than $1 million in revenue on a weekly basis.

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