Commission called greedy on Lotto franchise fee

Press, 13 March 1987, Page 5

Commission called greedy on Lotto franchise fee

PA Wellington The Lotto Commission has been called greedy for asking a $5500 franchise fee of agents wanting to sell the gambling game, Lotto. This would put most agencies in debt for the first two years of selling the tickets, said the managing director of Lotto Marketing, Ltd, Mr lan Shaw, yesterday. His company was unsuccessful in a bid to supply equipment and professional assistance for the game in New Zealand.

Australian lottery commissions charged outlets no fee and still paid a 7 per cent commission — the same as that planned for New Zealand agents. “The costs being

charged by the (New Zealand) commission mean agents would be out of pocket for the next two years of selling Lotto tickets,” Mr Shaw said. A typical agent would earn only $148,000 the first year and $185,000 the second year. The breakeven turnover was estimated by the commission to be between $200,000 and $250,000. “If New Zealand agents change hands every two or three years, as was typical in Australia, then most will be in a no-win situation,” Mr Shaw said. “If they sell a business they will lose the $5500 franchise fee and make no money from selling Lotto tickets.

“The Lotto Commission is just being greedy. In

other countries, Lotto commissions do not charge agents franchise fees and installation charges.”

He also said that if the' New Zealand Commission had ordered New Zea-land-made lotto equipment it would have saved millions of dollars. His group, which marketed this equipment, was not given a fair opportunity to tender. Mr Shaw said the whole Lotto situation should be reviewed and existing contracts cancelled. New contracts should be awarded on the basis of a fair tendering system.

The interim chairman of the Lottery Commission, Mr Chris Pottinger, was not available for comment yesterday.