Lottery brokerage

Jumbo signs ten-year supply agreement with Lotterywest

3 minutes read
Online lottery reseller Jumbo Interactive has finalised an agreement to supply the Western Australia’s Lotterywest with its online software platform and related services, its first agreement with a government-owned lottery.

The contract, which has been signed by Jumbo’s TMS Global Services subsidiary and Lotterywest, follows the companies agreeing a binding term sheet for the partnership in September. 

It will see Jumbo provide a white label platform to the lottery, receiving a 9.5% service fee for every customer transaction processed by its technology. It will also manage customer support on Lotterywest’s behalf, with the lottery handling marketing. 

The contract will last for an initial three years, with the option for three, then four-year extensions, for a maximum duration of ten years. 

Jumbo previously offered its reseller services to Western Australia customers through its Oz Lotteries portal. However, as it did not have a licence in the state, the agreement aims to ensure that returns from lottery sales go to Lotterywest. 

The initial agreement was struck in late September, and will see Oz Lotteries players migrate to the new white label site, provided they opt in. Lotterywest will also have the option to transfer these customers to its proprietary site within a year of the go-live date. That is scheduled for December this year. 

“I am pleased that the Lotterywest Agreement has now been signed on time and on terms as anticipated,” Jumbo chief executive Mike Veverka commented.

“This is a major achievement for Jumbo securing our first government client setting up a solid long-term partnership and providing strategic opportunities for Jumbo”, he said.

Jumbo’s services, via Oz Lotteries, will remain available in all other Australian states, through a similar agreement with Tabcorp. Signed in August this year, that deal covers the reselling of lottery tickets in New South Wales, Victoria, South Australia, Northern Territory, Australian Capital Territory and Tasmania, as well as international jurisdictions.

In related news, Gatherwell, the British external lottery manager acquired by Jumbo in November 2019, has triggered a £1m earn-out payment from its new owner. 

The business, founded in 2013, operates lotteries on behalf of local authorities and charitable organisations to raise money for good causes.

Jumbo agreed to acquire the business for a maximum consideration of £5m in November last year, comprising a £3m up-front payment, then a £2m earn-out to be paid in two tranches. 

The first £1m was triggered by the business meeting unspecified revenue and profit targets for the year ended 30 June 2020. This will be paid in cash, from funds held in escrow. 

A further £1m may be paid based on the business meeting a second set of targets for the year to 30 June 2021. 

Among the social lotteries run by Gatherwell are Your School Lottery, which raises money for schools, and regional lotteries to raise money for local causes in Buckinghamshire, and Bournemouth, Christchurch and Poole through the BH Coastal Lottery.

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