When Minister for Public Expenditure Brendan Howlin first mooted the idea of selling off the lottery for an upfront payment, An Post's bid to retain the lucrative franchise looked forlorn.

How would it ever compete with the big international operators and their gigantic war chests?

News yesterday that it had forged a strategic alliance with Ontario Teachers' Pension Plan (OTPP), the Canadian pension fund which owns Camelot, puts a healthier complexion on things for the semi-state.

Not least, because OTPP, better known as Teachers' in North America, boasts assets worth a staggering CAN$129.5 billion (€96 billion).

It represents the first real salvo in the bidding war for the State’s lottery business, a war which the Government will be happy to encourage as long as it nets the State a bigger upfront payment.

And no guesses for who will be stumping up the upfront payment in the An Post-Camelot arrangement, given the mismatch in balance sheets .

Nonetheless, the alliance indicates just how valuable the big guns view having a local, established brand on the ground.

Where this leaves An Post’s long-standing ties with Gtech, which have supplied the Irish lottery with ticket terminals since 1987, is unclear at this stage.

An Post may yet rue jilting Gtech for Camelot as the former is certainly outstripping the latter , winning three of the last four big state licences, in Indiana Illinois and most recently New Jersey.

Camelot has not fared as well in the US. While it serves as chief consultant in California and Massachusetts, its recent successful bid to manage the Pennsylvania state lottery foundered after the attorney general objected to the plan. The process remains in limbo.

Nevertheless, if Gtech and Camelot are rivals for the Irish business, they are partners in Britain, and it’s not inconceivable Gtech may continue to supply the technology if it fails to win the licence.