Newsagents breathe easy as online Lotto stalls

WA’S newsagents have been given a 12-month reprieve on plans to put Lotto online.

Newsagents were concerned when Lotteries Commission plans to put the money-spinning numbers game onto the Internet became public earlier this year.

Part of their concern comes from eastern states plans, particularly from the Tatts group, to put Lotto online. Each State benefits from its Lotto system and there are concerns that the State to put Lotto onto the Internet first will gain an Australia-wide monopoly on the game.

Lotto sales also make up an important part of each newsagent’s weekly takings.

It costs a business $25,000 to install a new Lotto terminal. When the business changes hands, the new owner has to pay 1 per cent of the Lotto takings to the Lotteries Commission to transfer the Lotto licence.

According to business broker Goodwin Mitchell O’Hehir managing director Graham O’Hehir, Lotto sales in lower demographic suburbs could represent more than 50 per cent of a newsagent’s turnover.

“In the higher demographic suburbs that can be more than 25 per cent of sales,” Mr O’Hehir said. “It also generates stronger secondary sales, such as magazines and stationery.”

WA Accredited News-agents Association chairman Richard Hatch said online Lotto would be a disaster for newsagents.

“If we lose Lotto to the Internet we will lose people from our shops,” Mr Hatch said.

“The Lotteries Commission believes it will only result in a small loss of people. About 1 per cent or so.

“I see about 5,500 customers a week. If I lose just 1 per cent of that, that is 55 people who won’t come into my shop. Say they spend $10 each – that’s $550 that I lose.”

Lotteries Commission public affairs manager Andrew Walton said the effect on newsagents of putting Lotto online was a major concern to the commission.

“We’re not planning to deliver anything towards online Lotto for at least another 12 months because the business case has not been made for it yet,” Mr Walton said.

“We met with our regional network last month and told them the Internet is here to stay, but the business case from our point of view is not clear cut.

“It’s not a straight forward process to put the game online – even technologically.

“We need to be convinced that there is a strong business imperative for adding online channels to our distribution network.”

Mr Hatch said newsagents had been struggling due to recent industry deregulation.

“Our biggest concern is the amount of product that is available at so many outlets,” he said. “The West Australian newspaper is the worst offender.

“Newsagents in the eastern states have more power because there are more newspapers there.”

Despite the tough times, Mr Hatch is not overly despondent about the future of newsagents.

“The newsagent industry is not in gloom. We just have to work a bit harder,” he said.