Georgia opens bid process for lottery and igaming licence

The Georgian government today (12 October) launched a request for proposal (RFP) process to choose a company to run its national lottery on a 10-year exclusive deal.

The winning company will be able to run the lottery both online and across retailers in Georgia as well as introduce new online products into the Georgian market with government approval.

The country, which has a population of around 4.5 million, first privatised its lottery in 2009 when the contract was awarded to the the Georgian Lottery Company.

In 2011 control moved to Georgian Post, the state-owned postal service. Various privatisation and joint-ventures have been discussed in recent years but until now the government has not chosen to run a full RFP process open to international companies.

Contenders for the contract include UK National Lottery operator Camelot, IGT (through Lottomatica/GTech systems), Intralot, Australian group Tatts, SciGames and newer entities such as NeoPollard and Playtech.

The latter two are trying to make their mark in the lottery market and a contract win in Georgia would enable them to pitch for bigger contracts. 

One of the key questions will be whether one supplier can supply best-of-breed across all product verticals. The Georgian goverment is understood to be looking for one single source for all the products, but a scenario where there is a lottery platform provider and one or severral online suppliers is not out of the question. 

What is still not determined is the extent to which the exclusive licence will allow the winning bidder to offer a full suite of online casino, sports betting and poker products and also how the Georgian government will block grey market operators from the market.

Discussions on which products to license and enforcement against illegal operators will be a central part of the RFP process, according to government sources.

The Georgian online gambling market has grown strongly in the past three years with online casinos and sports betting being the main area of growth, helped by the rapid proliferation of 3G and 4G mobile networks.

There are also eight land-based casinos in Georgia, although these officially only cater to tourists from Turkey and Azerbaijan.

Representatives of the Georgian government plan to meet potential bidders in late October with a planned closing date for the RFP process of 12 December.

The process is being run by consultants from PwC in conjunction with the Georgian Ministry of Finance and the entire process is being run in English.

Bidders are asked to offer a guaranteed up front payment of US$5m for the ten year exclusive contract plus a share or profits to the Georgian government.

RFP documentation is available at http://mof.ge/en/lottery and potential bidders can contact the Ministry of Finance on lottery@mof.ge