Ms Angela Kerins:

I thank the committee for inviting us to address it today. We welcome the opportunity to emphasise some of our key concerns regarding the general scheme of the gambling control Bill 2013. This issue affects not only Rehab but all the other charitable lotteries. I am aware the Association of Charity Lotteries in Ireland has made its own submission.

The Rehab Group operates Ireland's largest charitable lottery and we are particularly alarmed about proposals included in the scheme in relation to such lotteries. We believe that the implementation of current proposals would result in the complete elimination of charities from the lottery marketplace, because of the preferential and discriminatory position afforded to the national lottery. This will increase dependence on Exchequer funding and increase charities' reliance on other types of fund-raising, which have also been seriously impacted by the recession.

During the past three decades the impact of the national lottery on Rehab's lottery activities has been catastrophic, due to the unfair legislative regime currently in place. In 1987, Rehab held a strong 25% share of the lottery market. In 1989, following two years of operation by the national lottery, our market share had dropped to just 5%. Today our market share is just 1%, the national lottery being 98% and all other charity lotteries combined share that remaining 1%.

In 1996, following many years of negotiations with the charitable lottery sector, the Government introduced the charitable lottery compensation fund. This recognised the inability of charity lotteries to compete with the national lottery as a result of the severe restrictions created by the cap on prize funds provided for under the Gaming and Lotteries Act 1956. No restrictions apply to the prize funds of the national lottery.

In 2012, the Government took the shocking decision, without consultation, to phase out the charitable lotteries compensation fund. In this context, a complete removal of the cap on prize funds of charity lotteries would be the only correct and legal approach. However, the proposed general scheme continues to place an absurdly low cap on the prizes which can be distributed by charitable lotteries. It limits the monthly prize fund to €400,000 while the national lottery can offer unlimited prizes and has offered weekly prize funds of up to €190 million, through the Euromillions lottery. The new proposed limit of €1,750 of a top prize on scratch cards will have a particularly catastrophic impact on charitable lotteries as it reduces the current prize fund limit by 82.5% and will render them entirely unattractive to consumers and, therefore, uncompetitive in the lottery marketplace.

In the absence of a fair and reasonable charitable lottery compensation fund, we urge the committee to recommend that the cap on prize funds be removed entirely, to ensure fair competition and to prevent abuse of dominance in the marketplace by the national lottery. This is an issue which we believe must be rectified before the sale of the national lottery is completed.

The proposed scheme further exacerbates issues in regard to competition in the marketplace by failing to recognise the size of lotteries in its requirements for a minimum charitable contribution. We propose that the proceeds of a lottery be defined in terms of net gaming revenue - the money that the charity actually receives after the payment of prizes. This is the approach which has been adopted for the national lottery. A rising scale of charitable contribution would ensure that the bigger the lottery, the greater the percentage paid to good causes.

We have grave concerns about the structures which will underpin the regulation of gambling and lottery activities in Ireland. Instead of the establishment of an office, located within the Minister's Department, to oversee a small number of gambling and lottery activities, we propose the establishment of a specific regulatory authority, with an independent board, which is fully transparent and beyond political influence, charged with overseeing the operation of all gambling and lottery activities in Ireland. Unfortunately, it is the case that, in the absence of a fair and reasonable charitable lottery compensation fund and, in light of the current proposals to continue to cap prize funds for charitable lotteries, the future of charitable lotteries is very bleak.

It is likely that many of the legislative proposals provided for in head 19 will quickly become obsolete as this anti-competitive legislation fully eliminates the ability of the charity lotteries to compete in the marketplace, and therefore their ability to operate at all, thereby creating an absolute monopoly for the national lottery.

We would like to thank the committee for its attention and will be pleased to answer any questions members may have. My colleague, Mr. Frank Flannery, may wish to add a further comment.