P.E.I., N.B. receive pennies on the dollar in sale of GeoSweep shares
Atlantic Lottery purchased shares for $8.7 M in 2011, sold them in March 2016 for $160,000
The provinces of New Brunswick and Prince Edward Island can now put a dollar figure on a costly gamble they took in conjunction with the Atlantic Lottery Corporation.
In 2011, ALC purchased shares in Geonomics Global Games [then called Roboreus], a UK-based company that had developed an online lottery game called GeoSweep.
The shares were purchased on behalf of the provinces of New Brunswick and P.E.I. for $8.7 million.
On March 31, 2016, those shares were sold for $160,000, which ALC says will be split equalling between the two provinces.
Less than two cents for every dollar
That equals a return of less than two cents for every dollar invested.
ALC and the provinces had already written down the shares, essentially saying in June 2015 they had no value. When that happened, New Brunswick and P.E.I. were made liable to ALC for the cost of the investment.
ALC originally approached all four Atlantic provinces asking them to invest in Geonomics. Nova Scotia and Newfoundland and Labrador declined.
P.E.I.'s opposition finance critic Darlene Compton said she feels there should still be some sort of review to determine how the investment went ahead in the first place.
'Didn't create a job on P.E.I.'
"It's a very sad final chapter if that's what it is," Compton said. "Didn't create a job on P.E.I. I think it's a very poor investment by the province, by this government. Four-and-a-half million dollars would go a very long way to sustain and improve front-line services for health care, education, roads. I think it's a huge concern."
Atlantic Canada's four auditors general have been conducting a review of Atlantic Lotto, but it's not known whether the investment in Geonomics will be part of that review.
It's a very sad final chapter if that's what it is.- Darlene Compton
ALC's shares were purchased by Zeal Network SE [formerly Tipp24], a London-based lottery company that was already the majority shareholder in Geonomics. According to the company's latest quarterly report, Zeal obtained full control of Geonomics after securing a share purchase agreement with the remaining shareholders on March 10, 2016.
Zeal says its objective was to secure Geonomics' software development team. GeoSweep lottery games operating in the UK have been shut down.
Plug pulled in 2013
The plug was pulled on an Atlantic Canadian version of GeoSweep in July 2013, when Atlantic Lottery said the game wasn't living up to its potential in the market.
The P.E.I. Department of Finance confirmed the sale of the shares but referred any further inquiries to the Atlantic Lottery Corporation. A spokesperson said the corporation "turned the page" on the GeoSweep story a year ago, when it announced the investment was being written down.
At that time, ALC's president and CEO said in a statement the corporation had "learned from this experience."
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