It’s hard to imagine the South African national lottery company listing on the JSE, but over in Mauritius, the company that runs the national lottery, Lottotech, has successfully IPO’d on the Mauritius Stock Exchange. It’s an interesting listing, because it will be one of the first gaming groups to list on the island nation’s bourse, offering investors a way to profit from the country’s obsession with gambling. Historically, gambling has been a good business to be in. It tends to be a good counter-cyclical, offering strong returns when other industries face downturn, and generating a good deal of cash. – FD
ALEC HOGG: Lottotech, the Operator of the Mauritius National Lottery on behalf of the Government of Mauritius has just listed on the Mauritius Stock Exchange. Joining us from the Island State is Sunil Benimadhu, who is the Chief Executive of the Stock Exchange in Mauritius and Michelle Carinci, who is the Chief Executive of Lottotech. Welcome, Michelle. Ladies first. This is an interesting company…established in 2009. We have a similar operation in South Africa, which runs the lotto, but that’s not likely to be listed any time soon. Can you maybe unpack for us why this was an option or why you’ve listed Lottotech on the Mauritius Stock Exchange, and why shareholders would be interested in buying the stock?
MICHELLE CARINCI: Certainly. Firstly, it’s always been the vision to make Lottotech the people’s lottery and to have it listed. Listing on the Stock Exchange today will certainly enhance the status of Lottotech and the company. It will enhance our ability to move into complementary gaming opportunities and we’re perfectly positioned right now, because we’re a very strong brand in the country. We have over 75 percent participation. We have a strong international and local management team. We’ve had stellar financial performance over the last five years, we met all our commitments, and so it’s perfect timing for us to be listed because we see sustainable value creation for years to come.
ALEC HOGG: Michelle, we know that the national sport of Mauritius is horseracing. I don’t know if that’s exaggerating it a little, but certainly, you guys are crazy about horseracing. Is there an opportunity of perhaps working together?
MICHELLE CARINCI: Well certainly, there’s always an opportunity to do that. In my previous life in Canada, the lottery organisations actually worked very closely with the horseracing industry to enhance the purses and rejuvenate the business, so we’d always be open to having discussions to increase the business, regulate it, and enhance the product and the entertainment experience for the folks in Mauritius.
ALEC HOGG: There’s quite a lot of blue sky for shareholders who buy into Lottotech today.
MICHELLE CARINCI: Yes, we’re very optimistic about the future for three reasons. Firstly, the Lottery and Gaming Industry has been around for decades throughout the globe. It continues to grow and continues to be profitable. For instance, Lotto has been around since the 1950’s in Germany, and continues to grow. Our instant category – Quick Win Games – have been around the world for decades and we do experience remarkable growth. The industry itself is very healthy. Secondly, Mauritians like to game. They’re gamers. They’ve proven that over the last several years and we see our role, as the Regulated Operator in Mauritius, is to ensure that they continue to enjoy safe, regulate fun, so we’re also taking a lead in the Responsible Gaming initiatives with the products we introduced. In addition, we’re looking at opportunities that are maybe outside Mauritius, in examining them to see if they would add value to the shareholders. We’re a really strong brand with a strong management, and we’re in the infancy of our lifecycle, so lots of opportunities as we go forward in the future.
ALEC HOGG: I said to someone a little earlier that it was an understatement. You’ve just made an even bigger one. ‘Mauritians love to game’. They love their gambling and why not. Sunil, as you’re concerned, of course, the Stock Exchange is not a place to go punting. It’s a place to put long-term investments. This looks like a very exciting company for domestic Mauritians to get their teeth into, but can you expect that foreign investors will also come along?
SUNIL BENIMADHU: Yes, I think when we look at the statistics of the IPO that Lottotech went through about one month ago, the statistics show that foreign investors have already started investing into that company. With Mauritius being a very open economy and the Stock Exchange aggressively promoting itself outside, we would certainly expect foreign investors to be part of the play with regard to investing in this company, but also as far as investing in other companies listed on the Stock Exchange of Mauritius, is concerned. In fact, the statistics of foreign investments on the daily trading volumes currently accounts for around 45 to 50 percent of our daily trading volumes. There are certainly very important players for our market and I would tend to think that they would be very important players for Lottotech, too.
ALEC HOGG: Are there any barriers/obvious barriers that you can remove to make it easier for foreign investors to participate on the Mauritian Stock Exchange?
SUNIL BENIMADHU: No, there are absolutely no barriers to any investors. Mauritius is a very open economy. There is no exchange control. We are very well connected to the world’s financial system. We have international banks operating in Mauritius and on our exchange, so it’s extremely simple for foreign investors in South Africa, London, New York, Buenos Aires, or maybe Rio (because we’re talking about football) to connect to our trading platform and sign orders directly to their respective brokers in Mauritius. Mauritius is an extremely open economy. There are no constraints affecting foreign investors. They can invest in any of the listed companies operating on our exchange, and as I mentioned to you before, they already account for 45 percent of our daily trading volumes.
ALEC HOGG: They have a new one after today, called Lottotech.
