A SUBSIDIARY of the world’s largest lottery operator has emerged as a prospective bidder for the State’s lottery licence.

GTech Corporation, which is owned by Italian gaming giant Lottomatica, is understood to be one of several interested parties to have met officials from the Department of Public Expenditure regarding the tender.

The gaming technology and services firm operates dozens of state and national lotteries in the US, Europe and Asia, and already supplies ticket terminals to An Post, the current operator of the National Lottery.

It is unclear if the US firm,which employs 70 staff in Ireland, is considering a joint bid for the licence with An Post or planning to enter the process alone.

An Post, which has operated the National Lottery since it was established in 1987, indicated last week it was exploring several possible partnership options to finance its own bid.

Minister for Public Expenditure Brendan Howlin is expected to bring proposals for the sale of the licence to Cabinet this month. The Government is seeking an upfront payment, thought to be about €400 million to €600 million, in return for an extended licence period and an increased operator’s fee.

British lottery operator Camelot, which is understood to be eyeing the business, said it was engaging with department officials in the “interested parties” process.

Australian firm Tatts Group has also expressed an interest.

A report commissioned from Davy to assess commercial interest and advise how the State can maximise its return from the sale of the licence is due to be submitted to the department in the coming days.

“Davy stockbrokers has been engaged and their work is to complement the work and analysis already being undertaken by the department regarding the appropriate structure for the award of the licence, the duration of the licence and other key issues to ensure the return to the State is optimised,” a spokeswoman for the department told The Irish Times.

She said Davy had been hired to set out “alternative scenarios” for the next licence and make recommendations based on its findings.

The sale of the licence is separate from the list of State assets to be auctioned off under the terms of the EU-IMF bailout deal, announced last week.

A Government official said the lottery licence was separate as it related to “the granting of a licence as opposed to disposing of an asset and where a licence is granted there is no disposal”.

Mr Howlin has earmarked some €200 million of the proceeds from any licence deal for the proposed national children’s hospital. A Government spokeswoman said An Bord Pleanála’s decision to refuse planning permission for the hospital at the Mater site did not affect the lottery licence process.

If the Cabinet approves the sale, a competitive tender will be issued to interested parties, with the winner taking up the new licence from 2013.