Sunday lottery sales to help fight illegal gamers — SVL

Tax package ‘a balance of sacrifice and opportunity’ for the gaming company

BY JULIAN RICHARDSON Assistant business co-ordinator

Wednesday, February 27, 2013

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SUPREME Ventures Limited (SVL) says it is in a better position now to compete with the multimillion-dollar illegal gaming business, with Government permitting the sale of lottery tickets on Sundays and public holidays.

The measure was part of Government's $16.4-billion tax package, which included the state proposing to increase the lottery tax (GPT) rates by as much as three prcentage points on nine of SVL's games, including Lotto, Super Lotto and the immensely popular CashPot. Against this background, SVL's boss Brian George described the package as "a balance of sacrifice and opportunity" for the gaming company.

"I think being allowed to offer gaming on a Sunday, the message is 'we are taxing you, but we are giving you the opportunity to grow out of it'," George told the Business Observer yesterday.

"There are opportunities to be created by increased gaming," he continued. "Illegal gaming operates on a Sunday and that represents a tremendous market that we believe that we have a responsibility to attack."

Illegal operators reportedly earn up to hundreds of millions of dollars annually from their own version of Cash Pot, which George acknowledged is the game that is most easily replicated.

Cash Pot is the top game in SVL's lottery portfolio, representing 76.64 per cent of SVL's lottery revenue at the end of 2011, when the company's annual sales were $28 billion. The game has four daily draws, for which players choose one number from numbers one to 36 and place a wager. It is a take-off of an informal numbers game called Drop Pan, which was controlled by the Chinese community before the introduction of organised lotteries in Jamaica.

Sunday lottery buying had for years been outlawed in the face of strong opposition from the local church body, who are against state-approved gambling on what is considered the weekly day of rest for most Christians.

The move to allow the sale of lottery tickets on Sundays and public holidays becomes effective April 1, 2013. But, effective on that same date, SVL looks set to absorb increase in GPT rates from 17 per cent and 23 per cent to 20 per cent and 25 per cent respectively on nine games.

"It is a fairly aggressive number as it relates to the impact on our numbers," George said. "Certainly you are talking in the vicinity of close to $500 million that would adversely affect us in terms of our business."

But the SVL president and CEO added that, "You may not like the number, but you have to accept the principle", of the Government's measures.

"We have seen the impact of the National Debt Exchange, duty waivers and other measures. As a responsible company, I don't think we can act as if we should be exempt from that concept," he said.

George said the company has not considered increasing prices to play games in response to the tax measures, noting that such a move could in fact fuel illegal gaming.

"I can categorically say that we have not discussed this at the level of the board. It is counterproductive as a business to say 'how do we now increase our prices?' when the customer has an illegal option," he noted, adding that he hopes the authorities play their part in increasing vigilance against illegal operators.




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