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Turnover in the National Lottery to triple in 2020

The bidding process carried out by the Turkey Wealth Fund for the games of chance which have until now been organized by the National Lottery Administration has been completed and the contract was signed today with the Sisal - Şans joint venture, which was the highest bidder.

According to the conditions of the 10-year contract, which is formed on the basis of revenue sharing, the Sisal-Şans joint venture, founded with a 51% participation of Şans Digital and Interactive Services Teknoloji Yatırım Inc., a subsidiary of Demirören Holding, and a 49% participation of the Italian Sisal S.p.A, has committed to increase the turnover generated in the National Lottery to at least TRY9,320 million in 2020. The turnover in 2018 stood at TRY3.4 billion. The Sisal-Şans Joint Venture will also be obliged to increase revenue each year at the rates specified in the contract.

Under the new model, the National Lottery's turnover will nearly triple in the first year alone, while costs are also projected to decrease. The Sisal-Şans Joint Venture will run operations at a commission rate of 9.5%, including dealer commissions. In the new model, the number of terminals will rise to 10,000 in the first two years, and their revenues will also increase. The operation, which the Sisal - Şans Joint Venture Group will take over within 9 months at the latest according to the contract, covers the National Lottery, Hemen Kazan and Sayısal games.

The National Lottery license was transferred to the Turkey Wealth Fund for a period of 49 years in 2017. As a result of the studies carried out, it was concluded that obtaining services with the revenue sharing model would provide the highest benefit to the public rather than the privatization of the National Lottery. With this model, the Turkey Wealth Fund will continue to hold the National Lottery license and the model will be re-evaluated at the end of the 10-year contract period to provide the highest benefit to the public.

In this respect, there have been talks with leading operators from the USA, Czechia, China, the UK, Italy, Lebanon, Malaysia and Greece as well as companies operating in this sector in Turkey since February. During the book-building period starting on June 22 and ending on August 9, a total of 11 bids were received from the Sisal - Şans Joint Venture Group, the Doğan - Intralot Joint Venture Group, the SAZKA Group and IGT Austria GmbH.

In the evaluation process, the net present value, minimum turnover commitment and commission rates of the operator over these levels, in addition to the experience of the participants in the field of games of chance and their financial and technical qualification criteria were taken into account. The technical requirements were that the foreign partner would hold a minimum 49% share, as well as a minimum consolidated gaming turnover of USD 1 billion, and that they would operate at least a thousand terminals.

At the end of the bidding process, which ensures that maximum benefit is provided to the public, the net present value of the amount that will remain public from the 10-year turnover committed by the Sisal - Şans Joint Venture, which submitted the best offer in terms of high revenue and low commission, was calculated to be at least TRY 28.1 billion. The lowest bid in the process was realized at a net present value of TRY18.1 billion; thus, the competitive bidding process paved the way for the contribution of an additional TRY 10 billion to the public purse.

Zafer Sönmez, Managing Director and Member of the Board of Turkey Wealth Fund, said: “The National Lottery is a very important source of value for our country. When we assumed duty in September 2018, we decided that our asset which would benefit the public most quickly was the National Lottery license, and we prioritised our work in this direction. We are implementing a model which will bring our games of chance to global standards while reducing costs and increasing turnover. I hope that the process we have successfully completed in line with our mission to add value to Turkey will be good for our country and our nation.”

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