Licence agreement for the national lottery
More resultsIntroduction
Law No. 95/2013 formalised the procedure of awarding the national lottery licence to Austrian Lotteries (Östereichische Lotterien GmbH) through the company Olg Project Sh.pk. The opposition Socialist Party argued that the company appears to have been preselected. The then Finance Minister Ridvan Bode rejected the accusations.
- Country
- Albania
- Sector
- Public contracting
- Type of Law
- Capturing a market, an industry or public resources
Description of the law
Law No. 95/2013 formalised the procedure of awarding the national lottery licence to Austrian Lotteries (Östereichische Lotterien GmbH) through the company Olg Project Sh.pk. The opposition Socialist Party argued that the company appears to have been preselected. The then Finance Minister Ridvan Bode rejected the accusations.
While the law formalised the process, the auction procedure for the national lottery licence as regulated by Decision No. 25 of the Council of Ministers on 11 January 2012 included suspicious criteria (for example, a fixed price and the requirement of certain licences that added no value in the Albanian context). This led to allegations of a preselected winner. Also, as media reports revealed at the time, the criteria outlined in the decision were based on an assessment made prior to the auction process by the deputy director of the Austrian company that actually won the bidding procedure.
With the adoption of a special law to formally approve the licence agreement, the winning company gained additional guarantees. Specifically, Articles 5.4 and 5.5 of the licence agreement stipulate that Albania will not allow any other lotteries to be established for the 10-year duration of the licence agreement, giving the Austrian company a 10-year monopoly in the sector (see here). Austrian Lotteries started operating in Albania in April 2013.
Socialist Party MPs said they would repeal the law when they won election, but the contract has not been challenged since the new Socialist government took office in September 2013.
Full Law Name
Law No. 95/2013 of 4 March 2013 on the approval of the licence agreement for the national lottery between the Ministry of Finance, as the authorising authority, and the company Östereichische Lotterien Gmbh, through the company Olg Project Sh.pk.
Decision No. 25 of the Council of Ministers, dated 11 January 2012, on approving the assessment criteria for the bid, the standard documents, and the structure of the assessment commission on awarding the national lottery licence.
Type of law
Act of Parliament; Decision of the Council of Ministers
Scope of application
Substantive: national lottery
Personal: state budget, competition
Territory: national level
Temporal: Yes (licence awarded for a 10-year period)
Time of adoption and entering to force
- Law No. 95/2013 was adopted on 4 March 2013 and has been in force since April 2013.
- Decision No. 25 of the Council of Ministers was adopted on 11 January 2012 and has been in force since January 2012.
Who drafted it
Minister of Finance
Who submitted it to Parliament or other collective body, such local council
The draft law was submitted to Parliament by the Council of Ministers. The decision of the Council of Ministers was drafted by the Ministry of Finance.
Relevant developments in the process of adoption that show signs it is tailor-made
In January 2012, the Government of Albania announced the selection criteria for the winner of the national lottery licence (Decision of the Council of Ministers No. 25, dated 11 January 2012). The media raised concerns over the criteria (e.g. the price criteria was fixed at around €3 million, thereby avoiding the use of price as a competitive criteria for bidders). The Ministry of Finance responded that such criteria were based on an expert assessment by Friedrich Stickler of the European Lotteries Association. This response raised even more doubts, given that Stickler was then the deputy director of Austrian Lottery, one of the interested companies and the eventual winner of the national lottery licence (see also here).
The Ministry of Finance confirmed Stickler’s involvement in devising the criteria, and Austrian Lottery did win the national licence in Albania. At the time, the opposition Socialist Party raised allegations over the tender, implicating Finance Minister Bode, the owner of Balfin Group Samir Mane, and the Prime Minister's son Shkelzen Berisha.
According to one of the bidders that withdrew its offer (Intralot), the selection criteria were clearly set to ensure that Austrian Lottery won the licence. It is difficult to understand why the price was not a criteria but was instead fixed at ALL500 million (approximately €3 to €3.5 million) when such tenders elsewhere are worth tens of millions of euro. (At the same time, Malta sold its national lottery for €39 million. Earlier, Greece had sold its national lottery for €400 million and Turkey for €2 billion). Nor did the criteria to possess two licences – WLA Responsible Gaming Certification level 4 and WLA Security Control Standard – make sense. The first licence is awarded for a specific activity in a specific country. Also, the combination of the two licenses added no value, but amounted to another criterion that was met only by Austrian Lottery.
Only three offers were submitted. One of three was withdrawn (Intralot), while a second offer (submitted by a consortium of Lottomatica of Italy, GTech of Cyprus and Synot of the Czech Republic) clearly could not meet the criteria.
In July 2012, the Ministry of Finance announced Austrian Lottery as the winner of the auction.
Who adopted it
The agreement between the Ministry of Finance and Austrian Lottery was signed in December 2012 and was approved by Parliament in Law No. 95/2013, dated 4 March 2013.
Enforcement
Yes
Initiatives to challenge it and their outcomes
The procedure for awarding the national lottery licence in Albania was an auction. As a result, the Procurement Ombudsman and the Competition Authority had no power to review complaints from participating bidders (see here).
At the time, the opposition Socialist Party raised serious allegations and declared publicly that they would rescind the agreement once they came to power. However, this did not happen. One reason was due to the legal shield given to the licence agreement, which was adopted by special law. Nor was a criminal investigation opened in the case.
Affected sector
Public contracting
Direct beneficiaries and related networks
Austrian Lottery; Democratic Party officials at government level
Direct victims
State budget; bidding companies; other private companies operating in the field, given the fact that the national lottery license established a monopoly over lottery games
Socio-economic impact
The licence agreement and the law established a monopoly over national lottery games in Albania for 10 years and Parliament agreed in the terms of the agreement (Articles 5.4 and 5.5.) to actively protect the monopoly.
Impact on rule of law
The adoption of various concessions or licence agreements to create monopolies through special laws was not a common practice in Albania until the late 2000s. In fact, the most important similar case involves a concession for Tirana International Airport awarded in 2004, when a 20-year concession and monopoly of the airport were granted.
More recently, Albania has witnessed a significant increase in laws that approve concessions or create monopolies under questionable non-transparent bidding procedures. Also, the role of Parliament has been to provide additional guarantees so that such agreements and concessions will not be affected by a change of parties in government.
Every effort has been made to verify the accuracy of the information contained in this database. All information is believed to be correct as of December 2020. Nevertheless, Transparency International cannot accept responsibility for the consequences of its use for other purposes or in other contexts.
