Mr. Andrew Algeo:

I thank the Chair. Premier Lotteries Ireland welcomes the opportunity to address the committee on the Report on the Accounts of the Public Services 2021, Chapter 19 - Exchequer receipts from National Lottery ticket sales. In 2014, PLI paid €405 million to the State for the licence to hold and promote the national lottery until 2034. This is subject to oversight by the Regulator of the National Lottery, who monitors our compliance with the licence and the National Lottery Act 2013, with extensive enforcement powers so that the integrity of the national lottery is safeguarded and the revenues generated for good causes are as great as possible. The regulator is also responsible for managing and controlling the national lottery fund from which funding for prizes, the amount remitted for good causes funding and the operator’s running costs are paid.

The national lottery was established by the State in 1986 as a State lottery. It has proven hugely successful, generating more than €6 billion for good causes throughout the country. Since PLI commenced operation in 2014, the national lottery has raised approximately €1.7 billion for good causes while increasing by half the annual prize moneys for players. Last year, the amount raised for good causes was €304 million, the highest level since the national lottery was established.

The effect of the licence is that as sales have grown, the amounts disbursed to prizes and good causes have grown by roughly the same proportion. The national lottery operates in an intensively competitive market where we face an array of competing products and platforms continually seeking to persuade the public to otherwise spend their discretionary income. Unlike the national lottery, however, our competitors do not return 90% of their sales to the community through good causes funding, prize funds and commission to local retail agents. As such, it is essential we promote our national lottery to ensure its continued success into the future, while operating under a strict advertising code of practice.

When the State designed our licence, a clear decision was taken to ensure that expired unclaimed prizes do not go to the profits of the operator but instead are repurposed to promote and sustain the national lottery. This approach reflects similar practices adopted across the globe, where state lottery licences recognise the criticality of promoting their national lottery and typically stipulate that promotion of the lottery is not left to the discretion of the operator, but instead is funded directly or indirectly from ticket sales. In the UK, for instance, the UK Government chose to fund the promotion of its national lottery through a combination of a set percentage of ticket sales, at 1.08%, and a portion of good causes funding. In the most recent yearly figures for the UK, this amounted to £160 million, or 2% of sales. In Ireland, the funding for promotions could have been taken from ticket sales or good causes funding but instead the State decided to use funds accumulated through expired unclaimed prizes. As the Comptroller and Auditor General notes in his report, the expired unclaimed prize money must be spent on the promotion of the lottery. It should also be noted that the proportion of prize funds going unclaimed has almost halved since PLI began operating the national lottery.

As the licensed operator of the national lottery, PLI shares the State’s objective to preserve, protect and grow the national lottery, with the interests of players and good causes at the core of our operations. The licence model operated by PLI with oversight from the regulator has proven successful, with ticket sales growing by an average of 7% per year since 2015, a turnaround from the previous seven-year period, during which ticket sales shrank by 20%. This reversal in fortunes of the national lottery must be seen in the context of operating in a fiercely competitive market and facing significant challenges to maintain ticket sales, including against largely unregulated competitors, many of which piggyback on the national lottery without making any contribution to good causes.

I am sure members will recognise the positive impact of national lottery funding in their local areas. Last year, 6,800 community groups, charities and sporting bodies throughout the country benefited from the €304 million allocated to good causes and that made a meaningful difference to their activities and operations.

I thank members for their attention. I am happy to take any questions they may have.