Victoria’s $1.145 billion lottery licence deal cannot be shown to have secured the highest possible return because no rival operators were invited to bid, the state auditor-general has found.
The Victorian Auditor-General’s Office said there were sound reasons for negotiating exclusively with The Lottery Corporation, concluding that a competitive process was unlikely to produce a better result.
However, the watchdog said it was impossible to establish with certainty whether the government could have obtained a higher premium through a different approach.
“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.
The 40-year extension, announced in May, will keep The Lottery Corporation’s exclusive licence in place until 2068. Its existing 10-year agreement had been due to expire in 2028.
The arrangement followed an initial proposal from the company in November 2023 to extend the licence by between 20 and 40 years in exchange for a substantial upfront payment.
Victoria subsequently changed the law to allow the relevant minister to conduct private negotiations with an invited applicant. The government’s commercial adviser estimated the theoretical value of the licence at about $1.372 billion.
But the auditor-general warned that figure could not be directly compared with the final premium because it relied on assumptions and was subject to uncertainty, including over discount rates.
The agreement requires The Lottery Corporation to pay the $1.145 billion in two instalments during 2026/27. The report said the payment would improve Victoria’s short-term net debt position and net operating cash flow in the year it was received.
Victoria’s budget forecasts a net operating surplus of $1.05 billion in 2026/27, while state net debt is expected to exceed $199.3 billion by 2030.
The auditor-general found no significant probity issues but said the government’s handling of the deal had restricted public transparency.
Gaming minister Enver Erdogan said the process had delivered the best return for a licence extension in Australian history.
“The report is clear – this process was conducted properly,” he said.
Victoria’s opposition accused Labor of changing the rules and keeping the public in the dark in what it described as a “vain attempt” to keep net debt below $200 billion.
“Victorians deserve better than a government that taxes them in secret and signs up to secret deals behind closed doors,” an opposition spokesman said.
