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GEOSWEEP LOTTERY ROW GROWING IN CANADA
Monday July 23, 2011 : GEOSWEEP LOTTERY ROW GROWING IN CANADA
Multi million dollar investment in Brit company questioned
The Canadian provincial government of Prince Edward Island is facing questions over its investment of Cdn$4 million in the British internet gaming company Roboreus and its Geosweep product, which has reportedly not delivered a convincing performance in the British market.
Geosweep is an interesting variation on the normal lottery business model in which instead of wagering on a lottery ticket number, the punters buy their favourite "geo" - a specific point in the organising country - in this case Atlantic Canada, where 2.3 million geo’s have been arranged for wagering at a cost of Cdn$7.50 for a month.
What concerns detractors from the concept is that a pilot program in the UK earlier this year generated daily income of a mere GBP120.
On a provincial basis, governments in the Atlantic provinces of Canada are themselves at odds, with Prince Edward Island and New Brunswick each putting up Cdn$4 million on the project, but Nova Scotia and Newfoundland and Labrador declining to get involved.
PEI Finance Minister Wes Sheridan defended the project this week, saying that Atlantic Lottery products need new offerings to maintain revenues as income drops from older-type lottery products, and the GeoSweep project could pay for itself in three years.
"You have to take a look at a concept where you think it may be something that would turn a very good investment dollar over," Sheridan told CBC.
"If we sit idly by and let our revenue sources continually decline we'd be in no position to continue to have government grow."
Opposition finance critic Steven Myers said given the U.K. pilot failure, Sheridan should have followed the lead of Nova Scotia and Newfoundland and Labrador.
"We're throwing out $4 million at a time when we can't fund the $4 million that they need to build the high school in Souris and we can't get the $1.2 million to build an expansion on the Montague Intermediate school," said Myers. "It seems like a bad time to be gambling our money."
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