A subsidiary of Fubon Financial Holding Co. Ltd., the TSLC is the only state-certified sports lottery operator in Taiwan. The company has sent a written request to the SAC asking for regulatory approval to slash its projected revenues and guaranteed earnings by half, sources familiar with the issue said Feb. 28.
This marks the first time that a lottery operator is considering exiting the market since Taiwan launched lottery operations in 2002. If the SAC does not greenlight the request, “TSLC might have to stop issuing its sports lottery,” the sources added.
Taipei Fubon Commercial Bank Co. Ltd. signed a six-year contract with the Ministry of Finance in 2008 to have the TSLC issue sports lottery tickets on the island. Regardless of its operation results, TFCB promised to deliver guaranteed profits in the amount of NT$20.835 billion to the state, or roughly NT$3.4725 billion per year from 2008 to 2013.
Sources pointed out that the TSLC had originally promised to create revenues in the amount of NT$190.1 billion in the six-year period. The firm now wishes to cut the figure to NT$92.8 billion, a reduction of nearly NT$100 billion.
On an estimated profit margin of 13 percent, the TSLC’s projected earnings will also be halved to NT$12 billion from the NT$24.7 billion originally anticipated.
FFH Spokesperson Victor Kung said Feb. 28 that the group is waiting for a response from the SAC. “But if someone else wants to take over the business, that will be fine with us.”
SAC Deputy Minister Chen Hsien-chung said he has not received the written request yet, and that the SAC will consult its legal advisors and seek expert opinion on the matter.
Chen said the SAC will not allow the sports lottery, now three years in operation, to disappear from the market. If the negotiations with the TSLC fail, the SAC does not rule out the possibility of calling a new tender for the business.
According to the Regulations Governing the Issuance of Sports Lottery, which passed final reading at the Legislature in June 2009, 10 percent of net earnings from the business should be allocated for social welfare programs, with the rest being placed in designated funds to promote the country’s sports activities. (SFC-HZW)