Updated 11.57am with concessionaire's reply

The court has been asked to block the granting of a concession to a company for Malta’s national lottery.

The runner-up in the selection process is arguing that the preferred bidder should have been disqualified because it fell short of requirements.

In a judicial protest filed this month, Sisal Malta Consortium called on the court to scrap the selection process under which National Lottery plc was declared preferred bidder.

The call for proposals for a new national lottery licence was made in July 2021. The concession is for 10 years and is exclusive, meaning the winning company would be the only one running a nationwide lottery.

In November, National Lottery plc was announced as the preferred bidder to run the lottery.   

The company was one of two to submit offers following the call by the government’s privatisation unit. 

While National Lottery plc’s offer was for €105,077,777, Sisal Malta Consortium submitted a €53,330,001 bid. 

National Lottery plc, which is majority-owned by local gaming company Izi Group, is meant to take over the national lottery from Maltco Lotteries, whose concession ends on July 4, 2022. Maltco had signed its concession with the government back in 2012.

However, Sisal Malta Consortium, a joint venture between Eden Leisure Group, Sisal Lottery Italia S.p.A., and Austrian company Scientific Games International GmbH, is trying to block the government’s preferred bidder from snatching the winning ticket.

In its judicial protest, filed by lawyer Michael Psaila, the consortium alleges that the preferred bidder should not have passed an initial fitness and propriety check conducted by the authorities.

It says National Lottery plc had not employed more than 300 people in the gaming sector in recent years, an underlying requirement to be eligible for the concession. The preferred bidder should have been excluded from the race on the basis of this alone, it argues.

The runner-up also claims the winning bidder does not hold the required working capital to be eligible for the concession.

According to the judicial protest, the winning bidder’s submission is also financially suspicious.  

The unsuccessful bidders argue that, between 2010 and 2019, the national lottery raked in around €86 million.  

They describe the preferred bidder’s offer of €105 million as “anomalous” and one that ought to be investigated by the proper authorities.

The authorities, they add, have a duty to ensure that the national lottery is not put at risk because of a baseless and overly ambitious financial offer.

Sisal Malta Consortium also claims the decision by the privatisation unit to select National Lottery plc was “stained by serious shortcomings”, so the concession should not be awarded.

In December, Sisal Malta requested a temporary injunction to block the government from awarding the concession to the preferred bidder. This was upheld by the court, particularly on the basis that the bidders did not have the possibility to appeal the decision directly with the government.  

In conclusion, the runner-up is calling on the court to order the government to rescind the selection of the preferred bidder and start the entire application and vetting process from scratch. 

Concessionaire's reply

In a right of reply, National Lottery plc and IZI Group said that the impression given, that additional judicial proceedings to block the grant of the concession have been filed, was incorrect. 

"According to court records as at this morning, no such proceedings have been filed. The only proceedings filed on the matter, apart from the judicial protest reported, are those related to the request for a prohibitory injunction, which was rejected by the court in December 2021," the companies said. 

"While the judicial protest does include a reference to working capital, the claims made are incorrect and, in any event, this would have no consequence on the RFP, since there was no requirement relating to working capital in the RFP itself."

The companies said that National Lottery plc "clearly satisfied" criteria in the RFP related to the number of employees employed and revenue generated, contrary to claims made in court filings, and had submitted evidence to support this to the courts.

The companies also noted that a court had refused the injunction application filed by the failed bidder.