The An Post Superannuation Scheme, one of Ireland’s largest, has been selected as the preferred applicant in a €400m bid to run the country’s national lottery.

The Irish government, part of a consortium also comprising the Ontario Teachers Pension Plan and An Post itself, said it expected to formalise the agreement by December, when the first half of the €405m licence fee payment would fall due.

In a statement, it added that the Department of Public Expenditure & Reform (DER) would now finalise the terms of the licence and that the consortium’s company, Premier Lotteries Ireland, would likely assume the running of the contest from October next year.

The 20-year agreement will see nearly two-thirds of gross gaming revenue allocated to charitable causes, maintaining the terms of the current agreement.

It is not the first time Ontario Teachers has been involved in the gambling industry.

The CAD130bn (€80.6bn) fund bought Camelot Group, operator of the UK national lottery, in 2010.

An Post, meanwhile, was the previous licence holder through the An Post Irish National Lottery Company founded after the lottery was launched in Ireland in 1986.

The An Post Superannuation Scheme declined to comment, and it is unclear where the fund would place the investment within its portfolio.

According to its most recent annual report, covering the year through December 2011, the €1.7bn fund invested more than half of assets in fixed income and a further 38.8% in equities.

The remaining 8.6% of the portfolio was invested in property and alternatives at the time, with a 0.6% cash holding.

It nonetheless marks an increase in its domestic exposure following the crash, as the fund had decreased its Irish equity holdings to 0.5% by the end of 2011, although it invested in Irish property, domestic forestry and domestic fixed income.