Atlantic Lotto poured $8.7-M into GeoSweep company stake

Bong Aceron 7/15/2012 12:28:00 PM


Atlantic Lotto poured $8.7-M into GeoSweep company stake
N.B. and P.E.I. each contributed $4 million; N.S. and N.L. opted out of investment
By Rob Antle, CBC News Posted: Jul 14, 2012 8:10 AM NT Last Updated: Jul 14, 2012 1:31 PM NT


The Atlantic Lottery Corporation has funnelled $8.7 million into an equity stake in a British internet gaming company.

ALC has been reticent to disclose many details about its investment in Roboreus, creator of the GeoSweep game.

The corporation’s financial contribution was outlined in a note to its 2011-12 audited financial statements. That document was released Thursday.

“During the fiscal period, the corporation purchased an equity interest in Roboreus, a privately-owned U.K.-based internet gaming vendor,” the financial statement noted.

“The investment is classified as available for sale and is being carried at cost as there is no quoted price in an active market and fair value cannot be reliably measured.”

ALC spokeswoman Courtney Pringle Carver confirmed the $8.7 million amount.

She said two provinces — New Brunswick and P.E.I. — opted into the investment, each contributing $4 million.

Newfoundland and Labrador and Nova Scotia did not.

“Significant due diligence was completed in evaluating the proposed investment by Atlantic Lottery in Roboreus through a combination of internal and external professional expertise,” Pringle Carver said.

She noted that all four governments will share in any profit generated by the game in Atlantic Canada.

Profits generated by the equity stake will be divided between the two provinces that have invested the cash.

The $8.7-million infusion is significantly higher than previously-released figures.

In response to a freedom-of-information request a year ago, ALC said its total capital investment in GeoSweep/Roboreus was $3.85 million.

That amount was effective as of June 30, 2011.

The 2011-12 fiscal year ended nine months later.

Regional launch

ALC launched GeoSweep in Atlantic Canada in June, accompanied by a splashy promotional campaign.

GeoSweep is a lottery game similar to other ALC offerings, albeit with a digital — and geographical — twist.

Instead of picking numbers, players go online to pick a location on a map of Atlantic Canada. There are more than 2.3 million such locations, called Geos, up for grabs. The cost to own a Geo is $7.50 for 30 days, which works out to 25 cents daily.

There is one guaranteed daily prize of $1,000, which is selected from Geos that are actually owned. Neighbouring Geos are eligible to share another $500.

A big prize of $250,000 is also up for grabs every day. That draw, however, includes all Geos, whether they are occupied or not. No one has won the $250,000 to date.

CBC News reported this week that GeoSweep has failed to take off in the U.K. In March, income from the game in the entire country was just 100 pounds a day, or roughly C$160.

Sales remained weak in the U.K. even after GeoSweep cut the cost of playing by 90 per cent.

ALC’s investment in Roboreus marks its first — and, to date, only — foray into digital and external business opportunities.

The corporation has looked at lottery opportunities in Illinois and Albania, along with a move into online casino gambling.

ALC is operated by the four provincial governments in the region, which receive 100 per cent of the profits.

Those profits remained flat in 2011-12, down roughly one per cent from the previous year.

Bong Aceron

Posted by Bong Aceron