Mr. Liam Sloyan:

I thank the committee for inviting me here today to discuss the operation of the national lottery under the new licence. I hope the committee will understand that I will be limited at times in my presentation with respect to what I can say on specific matters. This is because, like other regulators, I have to protect confidential and commercially sensitive information and also follow due process with respect to any review I am undertaking.

It may be useful for me to begin by giving some background information on myself and the new office of regulator of the national lottery. My background is that I am an actuary who started his career in the private sector in the insurance and pensions industry. I worked mainly in finance, compliance and risk management. Prior to taking up my current role, I was chief executive of the Health Insurance Authority. This is a statutory regulator of the private health insurance market. The office of the regulator of the national lottery was established by the National Lottery Act 2013 and I was appointed as the first regulator on 17 November 2014.

The committee will be aware, and many people have referred to it already today, of the very significant contribution that the national lottery has made to society over the past 28 years. For this period, it has been enjoyed regularly by almost half the population and occasionally by two thirds. It has raised €4.5 billion for the good causes it supports. A new lottery regime began from 30 November 2014. Under the new regime, the licence to operate the national lottery is held by Premier Lotteries Ireland which is responsible for operating the lottery in accordance with the legislation and the licence. The office of the regulator has functions relating to managing the national lottery fund, overseeing and investigating the operation of the lottery, approving certain matters and enforcing compliance. The office has funding of €1.5 million per annum and sanction for ten staff.

Under the legislation, the office of the regulator carries out its functions in the manner considered most likely to ensure that there continues to be a properly run, sustainable and safe national lottery and that, subject to these requirements, funds for good causes are maximised. A properly run lottery is one in which there are processes in place and these are adhered to in order that the national lottery functions, from televised draws to the ways players and the national lottery fund are paid sums due, are carried out with all due propriety and in accordance with the legislation and the licence.

Public confidence is essential to the national lottery and, accordingly, the aim of ensuring sustainability includes protecting the reputation of the lottery in order that the community continues to have confidence in it. A safe lottery means a lottery in which the interests of participants are protected, which includes the availability of clear information for consumers, having appropriate measures in place to protect against under age and excessive play, and having fair rules and procedures for each game. Securing the greatest possible returns to good causes includes aligning the interests of good causes with those of the operator through the licence, monitoring the performance of the operator, and ensuring the allocated funds go to the right place at the right time and in the right amounts. I note that, under the legislation, the objective of maximising funds for good causes is subject to the other three objectives.

We carry out this work through the statutory powers and functions assigned to us by the Oireachtas. I will expand briefly on our primary powers and functions and work done in the context of each since the establishment of the office. The office of regulator is responsible for managing and controlling the national lottery fund. Over the first three months of the new licence, €48 million has been allocated to good causes, or €3.7 million per week. We are required to approve games and some other aspects of the licensee’s operations. Since the commencement of the new licence, there have been five requests for approvals from the licensee. As part of the process of review, we queried the original requests and nine further submissions were received, including amended requests. To date, of the five requests for approval, one request has been approved, one request was subsequently withdrawn and three requests are under consideration. Under these reviews we are concerned that risks to the objectives of the regulator have been identified and are being appropriately addressed by the operator. These objectives concern probity, sustainability, player protection and maximising funds for good causes.

With regard to the function of the regulator’s office to oversee PLI’s operations, this involves seeking and reviewing records and reports from the operator and reviewing these documents as well as on-site visits. In the context of the recent operational difficulties, we have required the operator to provide full reports on the outages, detailing the issues that arose, the reasons they arose, the extent to which they have been addressed to avoid a recurrence, the length of time taken to address them, matters outstanding and how long it will take to address those matters. A number of reports have been received and they are being reviewed.

Oversight of the operator also involves reviewing the systems and procedures in place as well as other aspects of its operations. This will involve themed reviews taking place from time to time, including on-site visits. For example, a review of the risk management systems and procedures in place at PLI against best practice standards is taking place. The office of regulator also has enforcement powers, ranging from issuing a direction to revoking the licence and including powers in relation to financial sanctions. The legislation provides for financial sanctions of up to €500,000 through application to the High Court or up to €250,000 if the operator agrees that the matter be dealt with by the regulator.

The committee will see that while PLI is responsible for operating the national lottery, the office of the regulator has important statutory functions, including overseeing the operation of the lottery, holding the operator to account and enforcing compliance with the licence and the legislation. We are determined to carry out these functions diligently in order that a safe, properly run, sustainable national lottery continues to be enjoyed by the people and, subject to this, that revenues for good causes are maximised. I hope this presentation has been useful in informing the committee on the role of the office of the regulator of the national lottery and I look forward to answering questions.