Newsagents and convenience stores are being offered a guarantee lottery products will not be distributed by large supermarket chains Coles and Woolworths until early 2018 in a bid to defuse a damaging pre-election stoush with the NSW government.
NSW Treasurer Andrew Constance and Tatts Group chief executive Robbie Cooke have signed a memorandum of understanding containing the guarantee.
The MOU also proposes to give newsagents and convenience stores selling lottery products up to $10,000 each - a total of $15 million in financial assistance.
The agreement, signed on Thursday, comes after the Newsagents Association of NSW and ACT warned that if they lose their exclusive right to sell lottery products from April, the industry will face ruin.
A five-year moratorium was included in legislation for the $1 billion, 40-year lease of NSW lotteries to the privately owned Tatts Group in 2010 to allow newsagents time to adjust to greater competition. It is due to expire on April 1.
The end of the exclusivity period became an election issue after opposition leader Luke Foley announced a Labor government would extend protection for newsagents in order to preserve the industry.
Mr Constance hit back with modelling showing that maintaining the exclusivity - and not expanding the lottery selling network - could cost the government $760 million in forgone revenue by 2050, when the contract with Tatts ends.
Mr Constance is due to announce details of the MOU on Friday morning.
But on Thursday night, Newsagents Association chief executive Andrew Packham questioned the value of the deal being offered by the government.
Mr Packham said he was "astounded" the government would sign an agreement when his association was still in negotiations with Tatts.
Additionally, the industry was due to meet with Premier Mike Baird to discuss the issue on Monday, he said.
Mr Packham said the understanding that lottery products would not be sold by Coles and Woolworths until March 2018 was of limited value because it did not include retail fuel outlets also owned by the supermarkets.
Tatts has indicated it wants to distribute lottery products through retail fuel outlets from April. It claims a trial in Victoria showed doing so would not cannibalise newsagents' business.
Just last week Mr Cooke told Fairfax Media that Tatts had "no intention" of distributing lottery products through supermarkets.
Mr Packham said he needed further information from the government. "But at this point it's problematic," he said.
