Lotto receivers lose Maltco injunction bid

A judge has rejected an application by lotto receivers to stop lottery company Maltco from imposing a higher bank guarantee on them.

Mr Justice Silvio Meli ruled that Maltco Lotteries was acting within its rights.

An application for an injunction had been filed by lotto receivers Alfred Muscat and Benny Agius in their personal capacity and on behalf of the Lotto Receivers Union (LRU).

They complained about increases Maltco was asking for in the bank guarantees submitted by individual receivers.

This was one of the main bones of contention between the company and receivers. The guarantee that the lotto receivers give the company serves as an assurance for the money they owe Maltco.

Maltco Lotteries was awarded a 10-year licence to operate the National Lottery of Malta from July this year.

The company told the court that, as a result of this licence, Maltco entered into a binding agency agreement with all of its agents who sell games that form part of the National Lottery, which was agreed to by all stakeholders.

However, the LRU sought an injunction claiming receivers did not agree with a provision that relates to the calculation of the guarantee. They felt that their rights were going to be prejudiced and they could suffer a financial loss.

But the company argued in court that it had asked for an increase in the receivers’ collective bank guarantee, or for an individual bank guarantee, in accordance with the provisions of the agreement.

The company said it had significant financial exposure with each agent due to their increase in sales through the introduction of new games.

It also said that the request to stop it from increasing its guarantees was deterring it from accomplishing its obligations in accordance with its agreement.

Mr Justice Meli ruled that the company was acting within its rights arising from the agreement and according to the terms and conditions.

The agreement had been signed by both parties.