N.B. Opposition questions GeoSweep investment

New Brunswick Opposition leaders want to know why the province invested $2 million in a lottery game that has been significantly underperforming in the United Kingdom.

"We have concerns that this game hasn’t been successful, yet the Alward government invested taxpayers’ money in it anyway," Opposition Leader Victor Boudreau said Tuesday about the province's stake in the new Atlantic Lottery Corp.’s internet game GeoSweep.

"We will certainly raise questions about this game, and why the decision was made to invest in it, when ALC comes before the Crown corporations committee," he said.

ALC launched GeoSweep in Atlantic Canada last month and has been advertising it heavily in the region since.

The game allows players to buy squares on a map grid of Atlantic Canada for 25 cents a day each and hope a computer picks their location out of 2.3 million other squares in a daily draw.

The jackpot is worth $250,000 although unpurchased squares won each of the first 35 draws, as of Tuesday.

ALC says it expects the game to be a success, but refuses to explain why it invested millions in it while it underperformed expectations in Britain.

"Atlantic Lottery is in a commercial partnership with Roboreus [GeoSweep's parent company]," said ALC spokeswoman Lindsay Shannon.

"As such, we are unable to talk about the details surrounding the investment."

The corporation has also refused to disclose GeoSweep sales figures in Atlantic Canada since its launch on June 7.

NDP Leader Dominic Cardy says he wants to know if the province and ALC realized GeoSweep was performing poorly in the U.K. when it bought in.

"Why did they pick a product that isn't making any money?" he said.

"I want to know whether anyone from the New Brunswick government asked the hard questions. You are not going to buy a car if you know the car doesn't work."

Lacklustre sales in U.K.

GeoSweep was invented in Britain in 2008 by Henry Oakes, an 18-year-old who told The Guardian in 2010 he had been "a struggling student dreaming of making it big."

Oakes and his brother James attracted enough investors to launch GeoSweep as a nationwide British lottery in October 2010, publicly predicting it would attract 250,000 players within three months.

That would have produced a minimum of 25,000 pounds a day in sales, the equivalent of $38,000.

'ALC did its due diligence, looked at the business case for investing and made a recommendation to its shareholders. Other provinces invested as well.' —Brendan Langille, New Brunswick finance department

But those projections fell flat. Instead, earlier this year the game was producing revenue of about $200 a day.

Still, with the game significantly underperforming, ALC convinced the Atlantic Canadian governments to let it invest several million dollars in GeoSweep's parent company Roboreus, in a bid to bring the game to Atlantic Canada and share in any success GeoSweep might find in other jurisdictions.

Atlantic Lottery Corp. is operated by the four provincial governments in the region, which receive 100 per cent of the profits.

The New Brunswick government approved a $2-million investment as its share of the GeoSweep deal in June of 2011 and New Brunswick finance department spokesman Brendan Langille says other provincial governments in the region did the same.

"The investment funds were put up by the ALC, not by the government, said Langille.

"ALC did its due diligence, looked at the business case for investing and made a recommendation to its shareholders. Other provinces invested as well."

Four days after New Brunswick approved its $2 million investment in GeoSweep, the game announced it was slashing prizes and prices in the U.K. by 90 per cent to deal with lackluster sales.