Auditor-General Flags Transparency Gaps In Lottery Deal
An independent review by the Victorian Auditor-General's Office (VAGO) has found the state government's decision to extend The Lottery Corporation's (TLC) exclusive public lottery licence by 40 years, in a $1.145 billion deal struck without a competitive process, limited public transparency, even though the review found no significant probity issues.
The Deal Under Review
Tattersall's Sweeps Pty Ltd, TLC's Victorian subsidiary, has held the state's public lottery licence since 1954. The current licence was due to expire in June 2028.
In May 2026, the government agreed to extend it to June 2068 in exchange for an upfront $1.145 billion payment, negotiated bilaterally with TLC rather than opened to other operators, according to VAGO's published report.
The extension was revealed to the stock market on May 5, 2026, the same day the state budget was handed down, following exclusive negotiations between the parties.
What The Auditor-General Concluded
VAGO said the government had "sound reasons" for negotiating with TLC directly, concluding a competitive process was unlikely to deliver a better outcome and that continuing with TLC would minimise disruption to the state's future lottery tax revenue.
"The agreed premium exceeded the reserve price set by the government," the report said, though it cautioned that the modelled reserve price of about $1.372 billion carried inherent uncertainty.
"While agencies sought to maximise value within a bilateral framework, it is not possible to know with certainty whether a higher premium could have been achieved under an alternative approach," the report said.
VAGO found no significant probity issues, but said the government's approach "limited public transparency about key decisions and the reasons for them."
Political Reaction
Victoria's Minister for Casino, Gaming and Liquor Regulation, Enver Erdogan, said the process delivered "the best return of a licence extension in Australian history" and that "the report is clear - this process was conducted properly."
The state opposition maintained the government had structured the deal to keep headline net debt below $200 billion, with a spokesperson saying "Victorians deserve better than a government that taxes them in secret and signs up to secret deals behind closed doors."
TLC holds similar long-term lottery agreements in New South Wales, South Australia and the Northern Territory (40 years) and Queensland (65 years).
Background: How The Review Was Scoped
VAGO's review followed three lines of inquiry: whether the decision to adopt a bilateral negotiation process was supported by robust evidence and advice, whether the Department of Treasury and Finance and Department of Justice and Community Safety followed relevant commercialisation and probity policies, and whether the 40-year extension optimised value for Victoria.
The 2018 licence that preceded this extension was itself awarded through a competitive process, with the Minister inviting registrations of interest before shortlisting and assessing formal applications, a contrast VAGO's report draws on to frame this year's bilateral approach.
