By Andrew Green, Staff ReporterREVENUES at Supreme Ventures Limited (SVL) are once again on a growth path, following the December lottery tax adjustment, said Paul Hoo, SVL deputy chairman.
Minister of Finance and Planning, Dr. Omar Davies, announced on December 15 that the Government had rescinded its full-scale implementation of a 15 per cent tax on all lottery winnings. The tax now applies to winnings of more than $15,000.
"We are on a path back to achieving what we had originally set out," Mr. Hoo said. "Last year was clouded by tax."
With revenues of $14 billion for 2003, SVL acquired the controlling interest in its only competitor, the Jamaica Lottery Company (JLC), on December 18 last year. But that acquisition was nearly overshadowed by the imposition of a 15 per cent tax on lottery winnings tax on September 1. Sales of the popular Cash Pot game, run by Supreme Ventures, dropped from $970 million in August to $508 million by October.
"Last year was a tough one," Mr. Hoo said. "We were in the middle of trying to evaluate the way out of that tax problem."
CHANGED OUTLOOK
Adjustment in the tax, following heavy lobbying, makes it easier to administer and much more attractive to customers. The industry outlook has changed to the point where SVL president and chief executive officer Brian George is now projecting revenues of $16 billion for 2004.
"We would like to do better than we did last year," Mr. Hoo said. "Changing the tax threshold (to $15,000) gives us a clearer picture of what we need to do to enhance our product."
CONTROL
As Jamaica's sole lottery company, it now sells Lotto, Pick3 and Three Way Drop Pan, along with Cash Pot, Lucky 5 and Dollaz games. This gives it control of almost 80 per cent of the island's overall betting and gaming market, which includes slot machine operations and horse racing.
Supreme Ventures started operations in June of 2001 and quickly overtook its competitor in revenues, and at the same time vastly expanding the lottery market in Jamaica. It is now looking for opportunities beyond gaming, Mr. Hoo said.
Establishing its lottery business required a massive investment in infrastructure, which is only partly being utilised. The JLC alone spent US$5 million to build its technological infrastructure, and found it was using about five per cent of that capacity to sell gaming products leaving 95 per cent of the capacity not being used.
This pushed the JLC into a decision to become a full gaming, currency and communications entity. It came to own and control Cambio Express, Moneygram remittance service, and distribute telephone cards and phones for Centennial Digital.
The company's wireless network brings opportunities in communications generally, which can operate off the network, he said. More specifically there are niches in bill payments, and remittance services.
And, Mr. Hoo said, "We are also looking at other applications."
