Oireachtas Joint and Select Committees
Thursday, 24 November 2022
Public Accounts Committee
Financial Statements 2021: National Lottery Fund
9:30 am
Brian Stanley (Laois-Offaly, Sinn Fein)
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I welcome everyone to this morning's meeting. Apologies have been received from Deputies Imelda Munster, Colm Burke and Verona Murphy.
If attending from within the committee room, members and visitors are asked to exercise personal responsibility to protect yourself and others from the risk Covid-19. Members of the committee attending remotely must do so from within the precincts of Leinster House. This is due to the constitutional requirement that, in order to participate in public meetings, members must be physically present within the confines of the place where Parliament has chosen to sit.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied by Ms Ruth Foley, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning we will engage with officials from the office of the Regulator of the National Lottery to examine the following: the 2021 financial statements of the Regulator of the National Lottery; the National Lottery Fund; and from the 2021 Report on the Accounts of the Public Services: Chapter 19: Exchequer receipts from national lottery ticket sales.
We are joined by the following officials from the office of the Regulator of the National Lottery: Ms Carol Boate, regulator, and Mr. Derek Donohoe, deputy regulator and head of audit and finance. We are also joined by Mr. Dermot Nolan, principal officer at the Department of Public Expenditure and Reform. You are all very welcome. I am aware that some witnesses had a difficulty getting here but everything is okay now. We appreciate that. I remind all those in attendance to ensure their mobile phones are on silent mode or switched off.
Before we start, I wish to explain some limitations to parliamentary privilege, and the practice of the Houses as regards reference that witnesses may make to other persons in their evidence. As they are within the precincts of Leinster House, witnesses are protected by absolute privilege in respect of the presentation they make to the committee. This means that witnesses have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue the remarks. It is imperative that they comply with any such direction.
Members are reminded of the provisions within Standing Order 218 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise, or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I now call on the Comptroller and Auditor General, Mr. Seamus McCarthy, for his opening statement.
Mr. Seamus McCarthy:
The national lottery was established under the National Lottery Act 1986. The objective of the lottery is to raise funds for the Exchequer on an ongoing basis, to be used for any or all of a range of purposes specified by law. Under arrangements put in place by the National Lottery Act 2013, and following a public competition, the operation of the lottery was licensed to an international consortium in 2014, for a contract period of 20 years. As part of the bid for the licence, the Exchequer received an upfront payment of €405 million from the operator.
The 2013 Act also provided for the establishment of an independent Regulator of the National Lottery, whose role is to oversee the operation of the lottery, and to manage and account for the National Lottery Fund. Net revenue from the sale of lottery tickets, after the payment of small prizes by retailers and deduction of retailers’ commission, is paid into the National Lottery Fund. This represents the fund’s income in a year. The remaining prize money and the operators' entitlement for the year are paid out of the fund into accounts managed by the operator. The amount remaining in the fund represents the amount payable to the Exchequer in respect of the year of account.
The income of the fund in 2021 totalled €682 million - €287 million was paid from the fund to the prize fund in 2021, and the operator’s entitlement for the year was €103 million. Almost €290 million was transferred to the Exchequer, and the balance of the fund available for transfer to the Exchequer at the year-end increased by around €6 million. The financial statements of the regulator reflect income of €1.5 million in 2021, derived from a levy on the operator. Expenditure by the regulator was €1.3 million.
The audit report includes a reference to the pension liabilities recognised in the financial statements of the regulator. Staff of the regulator are members of one of two contributory pension schemes, and the office of the Regulator of the National Lottery remits employee and employer pension contributions to the Department of Public Expenditure and Reform. Pension liabilities estimated at €531,000 in respect of staff who are members of the single public service pension scheme are recognised in the accounts, with a matching deferred pension funding asset.
In contrast, pension liabilities estimated at €3.2 million in respect of staff who are members of a model pension scheme are disclosed by way of note only. Responsibility for the pension liabilities earned by staff covered by the model scheme before 2014 - predating the establishment of the regulator - has not been settled. The regulator’s proposals about this matter have been under consideration by the Department of Public Expenditure and Reform since 2015.
The report before the committee today was undertaken to try to explain the complex transfers of funding involved in the operation of the National Lottery Fund, and in particular the contributions to the Exchequer. Annual sales for national lottery games increased by 57% between 2015 and 2021, rising from €670 million to around €1.1 billion. Over the same period, the proportion of ticket sales allocated for prizes varied between 55.6% and 57.6%. Contributions due to the Exchequer for the year of account increased by almost 62%, from €188 million for 2015 to €304 million for 2021.
In accordance with the terms of the licence, lottery prizes that are not claimed within a specified period are forfeited to the operator, to be used for the promotion of the national lottery. The contract specifies that such funds must be used within a year, and must include additional prizes. Some of the funding may be used for additional marketing. The examination found that, between 2015 and 2021, just over €124 million of expired unclaimed prizes was forfeited, an average of around €17.7 million per year.
By the end of 2021, €122 million of this had been used by the operator, with 98% spent on additional marketing and 2% used for additional prizes.
This report recommends that the regulator consider including additional information in the National Lottery Fund accounts to enable users of those accounts to see more clearly that the key provisions of the licence are being complied with, in particular around the amounts allocated to the Exchequer annually.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. McCarthy. As detailed in the letter of invitation. Ms Boate has five minutes for her opening statement.
Ms Carol Boate:
I thank the Chairman. I am delighted to have the opportunity to meet the committee in my role as regulator of the national lottery. I am joined by my colleague, Mr. Derek Donohoe, deputy regulator and head of audit and finance. I look forward to assisting the committee in its examination of the 2021 audited financial statements of the National Lottery Fund and with regard to chapter 19 of the Comptroller and Auditor General’s Report on the Accounts of the Public Services 2021, on Exchequer receipts from national lottery ticket sales.
As this is the first time the regulator of the national lottery has appeared before the committee, I would like to take a moment to outline to the committee members the context of the accounts of the National Lottery Fund. Specifically, I will outline the changes in the operation of the national lottery and its oversight as a result of the National Lottery Act 2013.
When the national lottery was created in 1987, it was initially operated by a State-owned company under licence on a management fee basis. The relevant Minister approved schemes of national lottery games and withdrew moneys for good causes from the National Lottery Fund as provided for in legislation.
In 2013, the new Act provided that the national lottery, while remaining State-owned, would instead be operated by a private company under licence following a competitive process. Under this legislation, the 20-year licence provides for the following: a risk-sharing arrangement whereby the State receives 65% of tickets sales less prizes won; prizes must, on average across the portfolio of games, be at least 50% of annual sales; retailer commission is a fixed percentage for the duration of the licence; and expired unclaimed prizes are to be spent solely on promoting the national lottery.
The Minister for Public Expenditure and Reform awarded the licence to operate the national lottery to Premier Lotteries Ireland in 2014 for a sum of €405 million. The 2013 Act also created the independent statutory Office of the Regulator of the National Lottery, which replaced the Minister in the role of approving schemes of national lottery games and managing and controlling the National Lottery Fund. The regulator also monitors and enforces compliance by the operator with the Act and the licence and exercises the enforcement rights of any trademark of the national lottery.
The regulator must exercise these functions with the objectives of safeguarding the probity and long-term sustainability of the national lottery, ensuring that the interests of participants are protected, and, subject to those objectives being met, maximising returns for good causes.
Thus, the regulator’s role centres around ensuring that the requirements of the Act and the licence are being met, with statutory powers to support this. The regulator’s remit is strictly provided for by legislation and under the licence. This means that the regulator does not have the authority to intervene in areas not provided for. Where an operational matter does not require approval and is not a breach of the licence, it is entirely a matter for the operator.
The first regulator was appointed in November 2014 and served in the role until May 2017. I was appointed in October 2017. In both the period before the first regulator was appointed and the interim period between our appointments, the Minister acted as regulator.
The Office of the Regulator of the National Lottery is staffed with relevant expertise to support its functions in areas including accounting, audit and law, among others. I am trained in regulatory governance and have a background in regulating for effective competition and consumer protection. My colleague, Mr. Donohoe, was previously a partner in a leading Irish accountancy practice with significant experience in auditing, forensic accounting, corporate governance and compliance.
The National Lottery Fund is essentially a bank account, which is required under statute to be maintained in the Central Bank of Ireland. The account of receipts and payments of the fund have been audited every year by the Comptroller and Auditor General since the fund was established under the National Lottery Act 1986. Under the 2013 Act, the fund continues in being and comprises a single account. The financial statements continue to be presented on a consistent basis as an account of receipts and payments.
A key function of the regulator is to manage and control the National Lottery Fund. In particular, every week, the office of the regulator reviews detailed financial reports from the operator and receives and disburses funds appropriately. The office cross-references these weekly reports with access we have to some of the operator’s systems and other reports that are received. Each week, the moneys attributable to good causes from that week’s sales are retained in the fund. Every two months, these good causes moneys are collectively transferred across to the Central Exchequer, in line with the Minister’s direction, in a timely manner. The accounts of the National Lottery Fund are then prepared annually by the regulator. The accounts for the year ended 31 December 2021, which members have before them, are the seventh set of audited accounts since the new licence and new statutory oversight commenced.
My annual report accompanying the 2021 accounts details the returns to good causes and the prizes won in each year since the start of the licence. Members can see they have both increased year on year. The compound annual growth rate of sales is approximately 8%. This equates to overall growth in sales of 57% from 2015 to 2021 and growth in good causes earnings of 61% in the same period. The impact on good causes earnings has been an increase from €188 million in 2015 to €304 million in 2021.
As highlighted in the Comptroller and Auditor General’s report, the returns to good causes and prizes won remained relatively consistent as a proportion of sales over the seven years. The returns to good causes ranged between 27.6% and 28.85%. This consistency is unsurprising given the design of the licence. The financial model in the licence aligns the commercial interests of the operator closely with the returns to the State from this asset. If returns to the operator are rising, then returns to good causes are also rising. If returns to good causes are falling, then returns to the operator are also falling.
As set out in our strategy statement for 2022 to 2024, the Office of the Regulator of the National Lottery is focused on continuing to safeguard the future of this important State asset as the consumer and technology environment in which the national lottery operates continues to change with speed. We are building on the system of regulatory oversight that has been established over the past seven years to ensure the propriety of the national lottery and protection of players. We continue to improve the accessibility of information available for different audiences on how the national lottery is regulated and how returns to good causes are calculated and transferred to the Exchequer. I look forward to working with the Office of the Comptroller and Auditor General and the committee in this regard.
I hope the information I have provided has been helpful to the members of the committee in providing an overview of the operation of the national lottery and the role of the regulator. I look forward to answering members' questions.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Ms Boate. The first committee member to speak today is Deputy Kelly. He has 15 minutes.
Alan Kelly (Tipperary, Labour)
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I welcome our guests and thank them for appearing before the committee. It is very important that they come in because being honest, there is probably a lack of information as regards how the licence works and how the regulator operates. We are currently going through the process of bringing in a gambling regulator. I will be asking the Department some questions about that as well. Obviously, there is a complete overlap here.
My first question is to Ms Boate. As was stated earlier, between 2015 and 2021, in accordance with the licence, €124 million of expired unclaimed prizes has been forfeited in favour of the operator. I read the licence agreement, which states that:
Any expired Unclaimed Prizes shall be forfeited in favour of the Licensee, provided that such Expired Unclaimed Prizes shall be used: solely for the promotion of the National Lottery and/or the Lottery Games ... in a manner determined by the Licensee, which shall include the funding of special draws and additional or top-up prizes; and which may include Incremental Marketing and advertising of the National Lottery.
"Shall" and "may" are two very important words in this licence. If Ms Boate thinks they need to be changed, she might say so in her response. Of the €154 million that is unclaimed, however, it would be very surprising for the public at large to find out the following. A sum of €122 million of this forfeited prize money has been used in accordance with the licence. The "shall" versus "may" differential is quite staggering, however. A figure of 98% of this has been used on the "may" bit, which is incremental marketing, and just 2% has been used on the "shall" bit, which is top-up prizes or prizes. Obviously, for anybody watching this debate and for us, that is not acceptable. It may be that Ms Boate feels the licence and the way in which it is worded is the issue. Is there another issue? To any taxpayer watching, however, that is not acceptable. Why is this allowed to happen? If the legislation or licence is the problem, Ms Boate should please say that and we will take that away and try to deal with it as legislators.
Ms Carol Boate:
I thank the Deputy. My role in this area is to ensure that the operator is complying with its obligations to spend these moneys on promoting the national lottery and on nothing else, and that those promotional activities shall include some top-up and additional prizes. The operator must then comply with the detailed restrictions on how it advertises and promotes the national lottery that appear elsewhere in the licence.
We do this routinely. We receive regular reports showing how prizes are expiring and an annual report on how the money has been allocated and spent on promoting the national lottery. We also regularly review the content of their advertising and promotion, which includes PR and direct marketing to players where they have opted in for it.
In terms of “shall” and “may”, it does not afford a particular proportion of itself but-----
Alan Kelly (Tipperary, Labour)
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A ratio of 98:2 is kind of ridiculous.
Alan Kelly (Tipperary, Labour)
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I was hoping Ms Boate would say there was a problem with the way the licence was worded. I think that is the right answer for her. From my perspective, I would have thought that was the way. With regard to 98% versus 2% and “shall” versus “may”, “shall” is stronger than “may”, although I am sorry for getting into dictionary terms. “Shall” is much stronger as regards putting more money into the prize fund for the players. To have “may” and to then use 98% is not proportionate. First, we had to get these figures through this process, and that did not come out naturally. Ms Boate might want to tell us why that is. From now on, obviously, it will come out. Did it never cross Ms Boate's mind, when she saw these figures coming through, that this is not the right way to do things or, and I give this as a genuine issue, the licence needs to be amended and Ms Boate would recommend that to the Department?
Ms Carol Boate:
It did cross my mind as to whether or not this was compliant with the licence, and that is why I checked whether “shall” ascribes a priority to one aspect of promoting the national lottery. “Incremental marketing” has quite a broad definition and so does “promoting”, which is even wider than “incremental marketing”. I did check whether it required me to ensure a certain proportion but it does not.
In terms of amending the licence, if the committee is not happy with the design of the licence-----
Alan Kelly (Tipperary, Labour)
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Is Ms Boate happy with it?
Alan Kelly (Tipperary, Labour)
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I appreciate that.
Alan Kelly (Tipperary, Labour)
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Does Ms Boate think this could be worded better?
Ms Carol Boate:
If you not like it, that would mean changing it. I would point out two things that are probably useful to the committee. The first is that in my experience of looking at other licences, insofar as I have been able to, and I do not speak many languages, there tends to be just one state lottery. A ring-fenced advertising and promotion budget tends to be a normal aspect of having a private company operate the national lottery for you. Otherwise, it would not probably spend as much on advertising and promoting the brand as you would wish.
Alan Kelly (Tipperary, Labour)
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I appreciate that.
Ms Carol Boate:
Where the money should come from and how much it should be is the next issue. In some places, it comes directly as a percentage of sales and in some places it is a fixed amount per annum. I will have to think about those things in the future for the next licence, but for this licence, that would amount to renegotiation of the licence.
Alan Kelly (Tipperary, Labour)
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I only have a certain amount of time and I want to ask other questions, so I would appreciate it if Ms Boate could keep her answers as brief as possible. Let us say that, next year, 99:1 is the split. Would that not concern Ms Boate? To anyone looking in, given the idea that, of the €122 million, 98% of it is gone on marketing, based on that licence agreement, the regulator, in my opinion, would be making a suggestion to the Department that this needs to be looked at. This is the first time we have ever come across this. Obviously, that licence needs to be changed. I do not think it is fair. It would have been my opinion that the regulator would have told us but there has never been a suggestion to the Department to change this. I recommend today that the regulator makes such a recommendation to tally with what we are probably going to recommend, hopefully. This is not sustainable. It is basically not fair or appropriate.
I want to ask a few other questions. My first question is to the Department and Mr. Nolan. We are bringing in the gambling legislation and I acknowledge the whole issue of the national lottery is slightly different. In the wild earthly world, I cannot see why we will need two regulators, and that is not a judgment on anyone, or anything like that. Gambling is gambling, and I like to gamble the odd time. The gambling legislation is going to cover all of the various different aspects of gambling, particularly the whole move into the online world. If we look at the national lottery, as I did last night, and forgetting about the lotto games, I counted 40 online scratchcard versions of games, which amazed me. Someone can lose €20 or €30 in a matter of minutes. That is no different to going into gaming on paddypower.com, BoyleSports, Ladbrokes or anything like that. Where one is different from the other is becoming more and more blurred all the time. They need one regulator, in my opinion. I know the Minister said the national lottery is bespoke but surely with one regulator and legislatively, through a licence, we can manage that slight differential with regard to good causes as part of that. I would be surprised if this committee does not make this suggestion. Will the Department look at having just one regulator? To be honest, this is smoke and mirrors when we look at that amount of gambling.
Alan Kelly (Tipperary, Labour)
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That is why I asked.
Mr. Dermot Nolan:
First, the legislation establishing the Regulator of the National Lottery is legislation that was brought forward by the Minister for Public Expenditure and Reform, and any amendments to that would also be for the Minister. The gambling regulation authority is being brought forward by the Minister for Justice. I know about the gambling regulation authority and what it is hoped that it will do. This is not something I thought about before coming to this meeting but first of all-----
Alan Kelly (Tipperary, Labour)
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I am just asking for Mr. Nolan's opinion. Does he believe we should have one regulator or not? Is it being considered? I am short for time.
Alan Kelly (Tipperary, Labour)
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Can Mr. Nolan find out and write back to the committee?
Alan Kelly (Tipperary, Labour)
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If Mr. Nolan does not have an opinion, that is fine, but what is his opinion, given his role in working with the regulator? Does he believe that would be a good idea?
Alan Kelly (Tipperary, Labour)
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For the public outside, the difference between Departments is irrelevant.
Alan Kelly (Tipperary, Labour)
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That can be looked at and incorporated as part of it. Perhaps we will ask, through Mr. Nolan, for the opinion to come through the Department in that regard, and also as to whether this was ever even considered. On the idea that it is covered by two different Departments, I am sorry, that does not wash; it is irrelevant.
To move back to the regulator, I have several quick questions on statistics. How much of the spend that goes on the lotto is done offline versus online? I am including all of these Mickey Mouse games.
Alan Kelly (Tipperary, Labour)
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What is 16?
Alan Kelly (Tipperary, Labour)
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Has Ms Boate seen that balance slightly changing all the time?
Alan Kelly (Tipperary, Labour)
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As a regulator, is Ms Boate concerned, given where we as a Legislature are going, by this proliferation?
Alan Kelly (Tipperary, Labour)
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I was expecting to see one. I was not expecting to see-----
Alan Kelly (Tipperary, Labour)
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Access has changed totally since then.
Ms Carol Boate:
The Deputy is right. The advent of the smartphone means you do not even have to get out of bed to access the Internet. There is a huge difference between the online national lottery channel and online gambling. The national lottery is a State-owned entity with bespoke legislation and a regulator singularly focused on it. Beyond that, it is only allowed to offered a very limited range of products. It is not allowed to offer slot machine games, poker or sports betting.
Alan Kelly (Tipperary, Labour)
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It is just a different way of doing the same thing. I went on to a couple of gambling websites. You can start off at 0.5 cent. You have to start off here at €2 and can go up, if I am not wrong, to €15 per game.
Alan Kelly (Tipperary, Labour)
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Sorry, €10 per game. That game will be over in a matter of a minute or less.
Alan Kelly (Tipperary, Labour)
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They are highly addictive.
Alan Kelly (Tipperary, Labour)
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I commend that. That is one thing I commend.
Alan Kelly (Tipperary, Labour)
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Do all gambling websites not have that?
Ms Carol Boate:
So they say. I am the only one looking at the operator and checking it is in place. We also have spend limits online, which is unique. I would love sometimes if they existed for online shopping. You cannot spend more than €75 in a day before it will kick you out until the next day. There are also limits for how much you spend in a week and online. They are not allowed to offer free tickets, two for the price of one or a loyalty points. You cannot pay by credit card anymore. You could at the start of the licence.
Alan Kelly (Tipperary, Labour)
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I think that is on most gambling sites as well.
Alan Kelly (Tipperary, Labour)
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Ms Boate keeps saying, "So they say", and I agree with her but, if anything, what she has said enhances my point. It is nothing to do with the witnesses personally but this needs one overarching regulator. Otherwise, there will be inconsistencies in approach. From a legislative point of view, I cannot see how we can distinguish gambling products, given the access now, and have different rules going in two different directions. It is madness. Ms Boate has made changes and those are all good from a regulatory point of view. With the new gambling regulator, hopefully that will come across the board. Ms Boate is correct that they say they are doing certain things and we do not fully know if they are yet. That is why we need a gambling regulator. Given that people will play across different websites including this one, we need an overarching view of that and that is why we need a regulator.
Ms Carol Boate:
There is some information I can give the Deputy that might be useful. I agree there are pros of having the two together, as well as cons. A pro is the plan to bring in a national self-exclusion register. I welcome that because we have players coming to the national lottery who have a problem and want a system whereby they are not allowed in to play. We have it on the national lottery website but it only applies to online national lottery. That is an example where a national approach would be of benefit to the players. From a practical perspective, however, this 20-year licence is designed around a single-person officeholder. We have tight deadlines. It would be complicated to integrate us and that could delay the gambling legislation. There will be an opportunity to revisit it in future.
Alan Kelly (Tipperary, Labour)
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This place bailed out the banks in 24 hours. We would be well able to manage that.
Catherine Murphy (Kildare North, Social Democrats)
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I reiterate the points on the 98% and 2%, which was the standout issue in the chapter produced by the Comptroller and Auditor General. I question why the information came through the Comptroller and Auditor General and not the Office of the National Lottery Regulator, which would have been the obvious place. That took many of us by surprise and the 98% and 2% is way out of line with what I expected to see. There is blanket advertising. You can hardly turn on the television, unless you are looking at something without ads, without seeing an advertisement for the national lottery.
We received some information on the breakdown of sales and prizes. One advertisement talks about 90% going back to the community. That does not stack up in terms of the number of prizes, which is what people understand that to mean. Of €1 billion in sales, €586 million went back in prizes. The gross gaming revenue was €468 million. Some went to the Exchequer. This was in 2021. There were retailers' commissions, a payment to the regulator and the operator's payment. Ms Boates says she monitors the content. What was her attitude to that advertisement? Did she take that up with them? She cannot say that is an accurate reflection of the money going back into the community.
Ms Carol Boate:
There are two questions. The first is on the 98% and 2% split and how these figures got into the public domain. The licence is clear on what information I can and cannot publish or release into the public domain. Where I can, I publish all the information and release it. Most is on our website. Sometimes it comes out in other-----
Catherine Murphy (Kildare North, Social Democrats)
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Where is it on the website?
Ms Carol Boate:
I was able to put the figure of €122 million, which is the amount of expired unclaimed prizes each year added up over the years of the licence, into the public domain under freedom of information legislation. Sometimes Acts of the Oireachtas can override it. Under a freedom of information request, my office determined the total value of money being forfeited to the operator to promote the national lottery could and should be revealed and we put it in the public domain. The Information Commissioner agreed with that decision. However, the breakdown could not be released. The Comptroller and Auditor General in the exercising of his statutory powers was able to release that figure and we welcome that.
Catherine Murphy (Kildare North, Social Democrats)
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Has Ms Boate sought changes to allow her to put that information into the public arena? It seems ridiculous that it requires the Comptroller and Auditor General to do that.
Catherine Murphy (Kildare North, Social Democrats)
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The public would welcome that information. They are the ones playing the national lottery. Has Ms Boate sought a change?
Catherine Murphy (Kildare North, Social Democrats)
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Will Ms Boate comment on that particular advertisement?
Ms Carol Boate:
When that advertisement came out, I reviewed it. We considered whether it was misleading by inaccuracy, omission or exaggeration and found it not to be because it is based on audited financial figures. They defined the word "community". Some people think "community" means good causes; others think it means prizes. They clearly defined what they meant by "community" and it was prizes, good causes and the retailer. In that context, 90% was not misleading.
Catherine Murphy (Kildare North, Social Democrats)
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Given the normal understanding of "community", it is hard to see how Ms Boate evaluated that and came to that conclusion.
Ms Carol Boate:
The Advertising Standards Authority for Ireland, ASAI, also looked at it. We did not receive complaints, that I recall, but the ASAI received a number of complaints, evaluated them and came to the same conclusion. When we had the lotto rollover, we monitored how the public reacted.
It was clear that people did not understand how much money went to prizes, how much went to good causes and how much went to the operator. I do not know whether the ASAI was responding to that, but in such a context, an advertisement at least tries to spell out-----
Catherine Murphy (Kildare North, Social Democrats)
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I found it misleading and will leave it there.
I wish to ask Mr. Nolan about the spending of the income accrued from the national lottery. In 2021, Benefacts was able to provide a breakdown thanks to the way that database captured information. This was important. The term "good causes" almost sounds charitable. I would have expected there to be a national framework that allowed us to see where the deficits were in providing funding to sporting facilities, the arts or heritage projects and that there would be some evaluation of this. Without having information that allows us to understand where the money is going and where there might be several funding streams to the one organisation, it is difficult to ensure that the money is going to the areas where it is most needed. There will never be enough. In terms of a database to replace Benefacts, where will the Department get the information from now to provide that breakdown?
Catherine Murphy (Kildare North, Social Democrats)
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There is some money from the national lottery and a small amount from the Exchequer. Stripping out the latter is important so that we can see what is coming from the national lottery. Can the Department do that? Does it have a database showing it where additional money is going to particular organisations?
Mr. Dermot Nolan:
As the Deputy probably knows from the Minister for Public Expenditure and Reform's answers to parliamentary questions, he commissioned a review of how we operated the national lottery receipts, how they were distributed and accounted for, and where they went. That review was carried out by Indecon and has been completed. It is with the Minister, who intends to bring it to the Government and publish and implement it. At this stage, I cannot give the Deputy an answer-----
Catherine Murphy (Kildare North, Social Democrats)
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Benefacts is a major loss, as it allowed us to see information at a granular level.
Catherine Murphy (Kildare North, Social Democrats)
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Regarding the new gambling legislation, the regulator appears to see the national lottery as a more benign type of gambling, but nothing is benign to someone who has a gambling problem. Is the blanket advertising more harmful than additional prizes? Has that been evaluated?
Catherine Murphy (Kildare North, Social Democrats)
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When will the next licence be issued?
Catherine Murphy (Kildare North, Social Democrats)
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Nothing will happen until 2034 because the regulator cannot interfere with the licence, or can she seek changes to it? Has she sought changes?
Ms Carol Boate:
Two things will happen and are happening. First, the code of conduct on advertising and its content, location and targeting is updated every year and must keep up to date with the rulings of the ASAI and the rules of the Broadcasting Authority of Ireland, BAI. We also add to the code. For example, we made it so that when advertising on social media, the operator must only target over-21s.
Second, the number of expired unclaimed prizes are reducing because there are no expired prizes online.
Catherine Murphy (Kildare North, Social Democrats)
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Legislation will change. Is it written into the terms of the licence that it is subject to legislative changes?
Catherine Murphy (Kildare North, Social Democrats)
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Does Ms Boate anticipate that there will be a change in the context of-----
Catherine Murphy (Kildare North, Social Democrats)
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I wish to ask about the regulator's professional fees. Nearly €31,000 was spent on public relations and marketing. Why would the regulator need to spend money on marketing?
Ms Carol Boate:
It was not marketing, but communications advice. We spent more in 2021 than we normally do. It is useful to have a communications adviser in case of a crisis, if there was one, and general queries. The consultant performed an exercise for us where it spoke to our stakeholders and asked them how we communicated information, whether there was enough information and whether it was in the right format. That fed into the strategy for 2022.
Catherine Murphy (Kildare North, Social Democrats)
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Who are the regulator's stakeholders?
Ms Carol Boate:
We do not have many, but they include the Department. The consultant spoke to retail representative organisations, the operator, people interested in protecting people from gambling harm such as Dr. Colin O'Gara, and players, who are difficult to contact. Those were the broad stakeholders. Based on that process, we are changing our website and coming up with new ways of delivering information on how the national lottery is regulated in accessible formats for different audiences.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Did Ms Boate say that the regulator spent money on a public relations consultant to look into how the regulator communicated with the Department and Premier Lotteries?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thought that was what Ms Boate said.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That could have been done by picking up the phone and talking to someone like Mr. Nolan-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----or someone in Premier Lotteries.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Surely a straight line of communication is better. The regulator can pick up the phone and-----
Ms Carol Boate:
And I do that regularly. When I started in my role five years ago, I reached out to various organisations, including the Retail Grocery Dairy and Allied Trades Association, RGDATA, to meet them and I have spoken to people who counsel persons with gambling problems and so on, but I wanted something more systematic that could feed into deciding where to spend resources on communicating the role in future.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Did the stakeholder consultation include politicians, such as members of this committee?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Was there market research involving members of the Committee of Public Accounts?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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It may have been someone else, but I received a call asking me my views on the national lottery and how much I believed was spent on good causes-----
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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-----and how much retailers got.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Perhaps it was, and we will have the opportunity to ask the operator in great detail about that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I got the same call two weeks ago.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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There you go. So, it was not the regulator.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is a coincidence.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I wish to discuss the regulator's investigations around the 98% and the 2%. Ms Boate told my colleague, Deputy Kelly, that the regulator considered it and worked out that there was not an issue. What processes professionally and personally did she go through in that regard? It is the issue of "shall" and "may".
Ms Carol Boate:
My office's head of legal and compliance is a qualified solicitor with many years of experience in private practice advising clients. He has also worked in public sector enforcement. I asked him to review the clause and establish what the "shall" and "may" meant, for example, should I be doing something to ensure a particular level of expenditure under those headings?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Ms Boate took internal legal advice.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Did she take any external legal advice?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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As legislators, we look at the words "shall" and "may" very differently. I will provide an example.
Ms Boate said she came from a corporate regulatory background. Is that not right?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Much of that is about what is allowed and not allowed and what is permitted and prohibited. To take an example, section 17(1) of the Companies Act 2014 states "A company may be formed [as in, it has the permission to be formed] for any lawful purpose by" and so on. However, section 17(2) states "The liability of a member of a company at any time shall be limited to". They mean different things.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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"May" is a permission. "Shall" is a prohibition or a mandate. They are totally different things. "You may not" means you are not permitted to. If I say Ms Boate may not smoke in here, it does not mean she is allowed not to smoke but that she may not smoke, she must not smoke.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Yes, but it is a real difficulty for us because, although the licence is not a statutory document, it is written in what we conceive as being very clear terms, as in thou shalt not do something but thou may do this.
Ms Carol Boate:
Exactly, and if it said "may" put money into top-up prizes, we might have had - I do not know - 0% because it would have been "may" not "shall". The other thing is, as the Deputy will know, any clause of a contract or licence is read in the context of the entire licence. In the context of the entire licence, incremental marketing is defined, rather circularly, as not base marketing. In some ways that "may" makes it explicitly clear that, when the operator is promoting the national lottery, it is not in breach of its requirements to spend base marketing money by also doing this other marketing.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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That is a distraction, if I may say. We have two elements of this - "shall" use it and "may" use it - but the proportions are directly inverted relative to the obligation and the permission, so we have 2% "shall" and 98% "may". Even if Ms Boate did not accept that reading is correct, which I think it is, she as regulator has significant persuasive authority, irrespective of the actual terms of the agreement. Did she ever write to the operator and say that, within the terms of the licence, she was concerned about the balance it was achieving and would it like to reflect on that and come back?
Ms Carol Boate:
No. As I said, my advice and my understanding is it does not prescribe that the operator should spend not more than half on one form of promotion and the other half on another form. It also explicitly says in it that it is entirely at the discretion of the operator. In general, there are certain areas where I am explicitly permitted not to intervene and make a judgment call as to how the operator should be spending its money or decisions it may be taking. Another one is-----
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Is this one of them?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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No, but there is a difference, and especially as Deputies, we are conscious we do not often have authority in a particular thing but we have a certain persuasive authority by highlighting a given issue one way or another. If this was a split of 40:60 or 55:45, I am not sure we would be having this conversation, but 98% of that money being spent on advertising is a big difficulty for us. It is a question around what is the reaction of the controller of that and what steps have been taken, because it appears the national lottery has used its discretion to spend an overwhelming amount of its money on its own self-promotion. We can get to how that is linked to problem gambling and other things, and Deputy Catherine Murphy has outlined what we may consider some misleading information on good causes and the spending. However, Ms Boate is the gatekeeper of all that. I suggest to her the interpretation she was given on the obligation and permission is incorrect and she probably should have sought external legal advice, especially when the conversation is at the level of the Comptroller and Auditor General highlighting it and it coming to this committee. The second thing is, even if Ms Boate has not done that, I suggest she has significant persuasive authority and may have had the opportunity to write to the operator and query, or find language that allowed her to query, whether this was in fact the balance suggested by the licence.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I am sorry, but that is the same thing.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Let me ask Ms Boate a different question then. It is in the regulator's annual report that there was an operator breach in 2021. There were 48 players who had self-excluded and they received marketing information from the national lottery within 36 hours of having self-excluded.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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If I go on my app, the national lottery has technology capable of taking my money immediately, whether it is from my phone, my bank account or indeed my bank card. It is very efficient at taking my money but it appears it was not quite as efficient at managing its own systems to ensure people who had actively self-excluded were not getting information for a 36-hour period. Can Ms Boate imagine what a difficult thing it is to self-exclude from an addiction and then receive information at the same time? Consider the capacity for harm in that 36-hour window. It is my understanding from Ms Boate's report no further action was taken by her in respect of the operator on foot of that. Is that correct?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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How was it fixed? What does Ms Boate mean? There was a breach.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Was there any assessment of the harm done? Did anybody speak to the 48 people?
Ms Carol Boate:
We assessed whether they had got back into their accounts to play, which they had not. The lock on the ability to go back into an account and play worked and they were not able to play. I completely agree with the Deputy, by the way, about the seriousness of it, and that is why I found it to be a breach. In most cases the person got one email within a few hours of excluding, but that is not acceptable.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Ms Boate concluded, "I determined that the Operator had breached Schedule 9 ... of the Licence and concluded that no further action was required." What further actions were available for her to take under the licence and the Act?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I am concerned about the harm to the person not the operator.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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It did not have to be the operator. It could have been the regulator or somebody else. It could have been Gamblers Anonymous.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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What was done to assess any harm done to those people because of a breach? A breach occurred due to the operator. It was noted and found by the regulator. Ms Boate took no further action, so the operator got off with it, essentially. Maybe the national lottery can tell us when it is here, but I am not hearing what assessment there was of the harm done to the people who had proactively self-excluded to protect themselves from their own addiction.
Ms Carol Boate:
First, we assessed whether they were able to play. Second, I considered whether they should be contacted. I have an expert on player protection in my office. They are a chartered psychologist specialising in research on problem gambling and they advise me. The advice would be that to contact those people would be further triggering to them, more than the one or two emails they got, and do more harm than good. On what further action was available to me, the one further action that is available-----
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Did they get an apology?
Ms Carol Boate:
That would be contacting the player further and sending them another email which would have been considered more marketing by the national lottery. It would have come saying "Hi, we are from the national lottery, we are terribly sorry for having contacted you". The one further action available to me in respect of the operator, as opposed to the players, is to withhold money from it. I do not have the power to fine it. I have the power to withhold money from it for certain failings and this did not meet the test. Some of the items I listed as having not happened are the things I must consider to ascertain whether I can withhold money from the operator for failing to deliver the national lottery. The test was not met in this particular circumstance.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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It is a matter of interpretation. I believe Ms Boate should have got external advice on the legal point we discussed earlier. I believe that interpretation is wrong. Ms Boate has player protection person in her office, but from the perspective of the State on behalf of the citizen, it appears from Ms Boate's answer that what we are concerned about is the operator, the regulator and that the communications by the operator would be further triggering. At no point does it appear there was a calculation about how the people felt and whether there was any other person who could have contacted them, apologised to them and delivered a measure of respect to them on behalf of the lottery system generally to say we are terribly sorry for this egregious breach and understand people are in a difficult situation. There were multiple other routes to reach those people and it appears the concern was within the licence, very narrow and with the relationship with the operator. I suggest there is a much broader perspective that is important and could have been considered in that as well.
I also find it problematic that there could be 48 breaches, that is, breaches in respect of 48 players, and that no action could have been taken in respect of the operator. I find that difficult.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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My apologies but the regulator's own report said that no further action was taken in addition to-----
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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That is not enough. The only way that that information is coming out is because of this conversation today.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank the Chairman.
Catherine Murphy (Kildare North, Social Democrats)
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Through the Chair, and not to leave the point under discussion, did the regulator withhold any money?
Catherine Murphy (Kildare North, Social Democrats)
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No money was held for any reason.
Ms Carol Boate:
There is no power and the Act does not provide for punitive sanctions. That is the way the national lottery regulatory framework is designed. The power to withhold money in certain circumstances is a contractual power within the licence. To date, no money has been withheld from the operators.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Is that the case in any circumstances?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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The regulator has never used these powers against the operator for any reason.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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The worst that has happened then is that there have been breaches and they have been noted in the regulator’s annual report.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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What would the operator have to do in order to have a breach worse than being noted in the annual report, that is, in order for the regulator to take action which would have other consequences? How bad does the action of the operator have to be?
Ms Carol Boate:
They would have had to have done something where it would have met the test about what one can withhold money for. Because this is a contractual power rather than a punitive power, I nonetheless tend to think of the test a bit like if a strawberry farmer was supplying strawberries to a supermarket and failed to turn up with them, and the supermarket did not get too sell, with the money involved there. That is one way of looking at it.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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What?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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But contacting people who have been self-excluded is not one of those things? Problem gamblers who are self-excluded do not meet that strawberry farming test?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Deputy Dillon is next to speak and I have some questions myself here.
On the research carried out by the operator, was the regulator aware that that had happened after the Comptroller and Auditor General’s report had been published, that is, between the period of its publication in September and the date of this meeting?
Brian Stanley (Laois-Offaly, Sinn Fein)
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At least two of us were contacted, which people are entitled to do, but I found it interesting. Was the regulator contacted by a polling company? No.
On the roll-over of the prizes, it has rolled over, I understand, 51 times-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----before the must-win-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was over 60?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was extensive then, in any event, and that was before the must-win limit of €19 million was introduced.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who suggested introducing the limit?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The operator decided to introduce it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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One would have to conclude that it has reduced credibility with a possible fall-off in sales, because it was seen to be virtually impossible to win it. The operator did this but why did the regulator not propose it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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That there would be a cut-off point and a must-win limit.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am asking Ms Boate this question now as regulator. I am sure that there would be numerous and regular communication between her office and the operator. Surely, at that point, given the level of public discussion around this, the whole credibility of the national lottery was a stake here. As regulator, did it occur to anybody in her office of the nine or ten staff members which I read of in the briefing notes, to propose picking up the phone to the operator to say that while this can continue indefinitely, it would be a good idea to try to have a cut-off point? In other words, why did the regulator’s office not suggest this?
This stands out for me and I do not play the national lottery. It was raised in this House at the Committee on Finance, Public Expenditure and Reform, and Taoiseach, where Dáil Deputies took a particular interest in the matter-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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------because the public who play the lotto got on to the Deputies about it. I find that strange, where the regulator has confirmed this morning that no one in her office raised this matter, or raised it with the operator.
On the number of balls that are played-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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I do not understand that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can I just say this to the regulator because it has come up on a number of occasions here this morning, where I have heard this discussion going backwards and forwards. I understand that the role of the regulator is to ensure that the lottery operates as per the terms of the licence and within the law. I understand and get that. A regulator cannot be a bystander when major issues are arising, such as some of the ones discussed this morning. Where the regulator’s office does not pick up the phone in respect of some of the earlier matters, there is a lack of communication directly with the Department on them. The Department is present here before the committee this morning in the person of Mr. Dermot Nolan. There would also appear to be a lack of communication with the operator. I find it strange because the operator can be contacted with the use of persuasive powers, to adopt the term used earlier on by Deputy Carroll MacNeill, to at least flag this up as a credibility issue. Large credibility issues have been highlighted here and this is one of the major ones. This is the fact that the prize-money has been rolled over. Mr. O’Donoghue from the regulator's office has confirmed that this has occurred 60 times. I lost count at 51.
My point is that surely the regulator’s has some role in at least discussing these things with a view to perhaps putting limit in place, changing the licence in the future, or is there a need to change this in legislation? I find that odd.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Could this issue not have been raised there?
Ms Carol Boate:
What I meant was that I did not suggest to them that they redesign the game to put in place a must-be-won condition. When the lotto hit its €19 million level, my first concern was that players did not seem to understand where the money was going thereafter, because 25 cent of every lotto ticket goes to the jackpot and it was going to the next year. My main concern, which I put to the operator, was to communicate the game properly.
Brian Stanley (Laois-Offaly, Sinn Fein)
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People buy tickets because they have a chance of winning and that is why people gamble. That is the compulsion which drives people.
Brian Stanley (Laois-Offaly, Sinn Fein)
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On the extra balls that were introduced, that is an issue which I hear talked about over and over again and this is being said by a person who has never played the game. I believe the RED C polling company phoned me up about it, it was one of the questions it asked me and I was not much use to them on that front. I hear this point, however, from people who do play the game. It is very much a big bone of contention because it makes the games a great deal harder to win. Did the introduction of this proposal come from the regulator’s office or did Premier Lotteries Ireland just decide to do it? Where did that come from?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am asking about the number of extra balls which were introduced.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who decided that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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That also came from Premier Lotteries Ireland as well.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. On on the saturation advertising, I do not play the game but I see the advertisements over and over again. Is the regulator aware that 40% of the complaints to the Advertising Standards Authority for Ireland this year relate to the national lottery?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Has the Advertising Standards Authority for Ireland been in contact with Ms Boate's office regarding this?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Regarding the term "good causes" being used and 90% of the money going back into the community, I have read the briefing notes and the Comptroller and Auditor General's stuff on this. It is about 28% that actually goes back into community and retailers get between 5% and 6%, according to the briefing notes. Then there are the winnings. That is what it is about. While technically it may be argued it is correct, it is a big stretch according to my interpretation of the English language. If you did a vox pop in the street and asked 100 people, I think 99 of them would say the words community and good causes meant it was distributed to different bodies, sporting bodies, charitable bodies or whatever. They would think the winnings were separate. The retailers are entitled to that revenue because they operate this service. They have to run a business and pay the bills and their overheads. They are entitled to that. That would be most people's interpretation of that. Does Ms Boate have concerns about that advertising claim?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am asking Ms Boate, as the regulator, if she has concerns about the credibility of that claim? It is a direct question.
Ms Carol Boate:
No, because it is very clearly defined in the advertisement. If the advertisement said 90% goes back to the community and, in teeny tiny writing, mentioned what was meant by that, I would have concerns, but the advertisement goes on to explain very clearly how that term is being defined. The term "community" would be interpreted differently by different people and could have been interpreted to mean good causes. That the national lottery defined what it meant by community so clearly in the advertisement is why I did not have a concern.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I would have a different view. I think the vast majority of people, if asked, would have a different view, but I accept Ms Boate's explanation.
Alan Dillon (Mayo, Fine Gael)
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I welcome our guests. I will follow a similar line of questioning regarding the rollover jackpots. It was reported that more than 15,000 players a minute signed into the UK national lottery app and its website ahead of its £184 million jackpot in May. Did PLI experience similar interest in its app and website plays during the extended rollover earlier this year? Do the witnesses have any indications around that?
Alan Dillon (Mayo, Fine Gael)
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Is that something that is evaluated with regard to the number of gamers, both online and through agents? Does the regulator look at the trends or statistics for the number of users and players?
Ms Carol Boate:
Yes. We have a variety of different reports on how many people are playing, how many tickets are sold each draw, how many people are playing online and in store, how many people are going online each week over a quarter, how much they are spending, trends in the spend, how many people are self-excluding and how many are spending up to a limit. We have broad oversight of that area. Both online and retail experienced surges in spending on the lotto specifically.
Alan Dillon (Mayo, Fine Gael)
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Is there a breakdown of sales of lottery products sold by agent premises and those sold online for 2021?
Alan Dillon (Mayo, Fine Gael)
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Has there been significant growth in the move to online?
Alan Dillon (Mayo, Fine Gael)
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Does Ms Boate have the growth trends since PLI entered the market? What has that growth been?
Ms Carol Boate:
I can give a little more detail. It was 2% in 2015 and had gone up to 5% in 2016 or 2017. It was quite slow at the beginning and that was in part because the online channel was not really being heavily advertised until around then. We were keeping a very tight rein on it while making sure all the controls I outlined earlier were definitely in place and working and that the operator had all the systems in place to make sure the spend limits, the self-exclusion and so on were all operating. That took off in the pandemic.
Alan Dillon (Mayo, Fine Gael)
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As the regulator, would Ms Boate be of the opinion that an increase in turnover for the national lottery would be in the public interest, given its commitments to the good causes fund?
Alan Dillon (Mayo, Fine Gael)
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The question was whether Ms Boate would consider an increase in turnover for the national lottery in the public interest, given its impact and its commitment to the good causes fund.
Alan Dillon (Mayo, Fine Gael)
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I appreciate that answer. It has been reported recently that Allwyn intends to take over Camelot. Has Ms Boate sought information on this or on the position of the Irish national lottery operation, PLI? We understand PLI is an amalgamation of the Ontario Teachers' Pension Plan, OTPP, An Post and An Post Pension Funds. If Camelot is acquired by Allwyn, given that the OTPP is the owner of Camelot, what does that mean for the current state of play here in Ireland?
Ms Carol Boate:
I have asked that exact question of the operator. It does not have any direct impact. Camelot in the UK and Premier Lotteries Ireland share an owner. I tend to think of them as sister companies. They both have the Ontario Teachers' Pension Plan as an owner so it does not have any direct impact. There is also a company called Camelot Lottery Solutions, which is a separate company that provides games and other services and designs websites for lotteries. That is one of the suppliers to our national lottery. I wanted to make sure the arrangements will not be impacted.
Are there clean lines between who is doing what and where the responsibilities are, and no blurring of the lines? I understand that is the case, and it is being checked. The CEO has assured me that he is checking to make sure that is all perfectly clear before the sale goes through, if it does.
Alan Dillon (Mayo, Fine Gael)
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Has the Department of Public Expenditure and Reform made an assessment in respect of this potential takeover?
Alan Dillon (Mayo, Fine Gael)
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On the pension provisions, I will ask the departmental officials for an explanation on what happens when a civil servant on a pension that predates the single public service pension scheme moves to a newly established State body, such as the Office of the Regulator of the National Lottery, and wishes to carry their pension with them. Will the officials provide an overview on this? We know that there is an accumulated pension liability of €3.2 million in respect of staff service under the model pension scheme, which is not reported in the financial statement. Can we get the current position regarding this?
Mr. Dermot Nolan:
Most of the employees of the Office of the Regulator of the National Lottery are in the single pension scheme. I believe one or two may have moved across. To be fair to the regulator, she brought that to my attention in August. I have only been on this work since July or August, but the regulator brought this matter up at our first meeting. We have had consultations with our own pension policy people and have got legal advice, so that will be resolved in the next couple of months. It will probably involve a memorandum of understanding between us and the Office of the Regulator of the National Lottery, whereby the contributions move across to the Department of Public Expenditure and Reform but that Department will ultimately pick up the cost of the pensions for the civil servants, or anyone who transferred there previous to the single scheme.
Alan Dillon (Mayo, Fine Gael)
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When will the determination be made?
Alan Dillon (Mayo, Fine Gael)
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On the regulator, can Mr. Nolan give us an update on the accumulated pension liability of the €3.2 million?
Mr. Derek Donohoe:
On an annual basis, we obtain an actuarial review of the pension liabilities by an independent actuarial expert. That amount is obtained for inclusion in the financial statements. As of 31 December 2021, the amount was €3.2 million for those who are not members of the single scheme. While that was not provided for as a liability on the balance sheet, it was noted in the notes to the accounts that there was this liability for these pensions. There has been disclosure of the amount all along. The most recent actuarial valuation was done as at 31 December 2021 and those are the amounts included in note ten to the accounts.
Alan Dillon (Mayo, Fine Gael)
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Has that been included in every year-----
Alan Dillon (Mayo, Fine Gael)
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-----subsequently to 2021?
Alan Dillon (Mayo, Fine Gael)
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Sorry, prior to 2021.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will ask Mr. Nolan what percentage of the company is owned by An Post? What is its share of investment in it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. Did Deputy Carroll MacNeill have one quick question before we break?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I have one question on the 48 self-excluded people who were contacted. How many self-excluded in 2021 and in 2020? What is the number of people who self-excluded?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Yes, I do. That is what I want to know.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Is it easy to check? Is it something Ms Boate can come back with after the break?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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That would be good. Thank you.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I suggest, if it is possible, that we get that figure before the end of the meeting-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----as a communication back to the office or, if not, that it is followed up on.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Can Ms Boate get back to the Chair by the end of the meeting? Is that something somebody could check?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We will have a second round after the break. We have to watch it because some Deputies are tied up with other duties but they will appear later That is generally what happens. We will take a short ten-minute break and then resume.
Brian Stanley (Laois-Offaly, Sinn Fein)
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This was requested by Deputy Carroll MacNeill.
I will come in with some questions. On the comparison with other lotteries, I understand the British lottery has a different system for unclaimed prizes. After 180 days, the money is distributed to different organisations and bodies in the community. Was Ms Boate aware of this?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Would that be a good system to have here? Would it be a good measure to bring in here?
Brian Stanley (Laois-Offaly, Sinn Fein)
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According to the figures provided by Ms Boate this morning and in the briefing, between 27% and 28.5% of what is given out goes back into the community. That is the figure.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In the understanding of the public, and in my understanding, it is between 27% and 28.5%. That is the variation in the figures. We will accept that. It is the understanding of committee members as well. We have ascertained from the report of the Comptroller and Auditor General, which we did not know until the report was published, that there was more than €120 million in unclaimed prizes in a six-year period. I was surprised by that. We have also discovered that just 2% of that is redistributed to community groups, sporting groups and so on. I am sorry; it is actually used as extra prize money. None of it goes back into the community. By way of comparison, in the British model unclaimed prize money goes out after 180 days. Would that be a welcome development if we brought it in it here?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We accept the figures we have been given by Ms Boate. I want to separate two matters. One is that from the operation of the lottery and in terms of what is claimed and everything else, we know that between 27% and 28.5% goes to good causes. We accept that. We will park that for a minute. I am asking a different question about unclaimed prize money. There is more than €20 million a year in unclaimed prizes. Does Ms Boate think it would be a good idea to have a measure here, similar to what the British lottery does, such that all that money, or the bulk of it, would go to good causes? I am just asking about the unclaimed prize money. That is the element I want Ms Boate to stick with.
Ms Carol Boate:
Yes, but if one were to follow the logic, one would also have to adopt the aspect of the UK model under which a marketing and promotion budget is given to the operator. It is complicated, but the operator gets a fixed amount and a percentage of sales and then money is taken out of the good causes fund and given to the operator for particular marketing projects as well.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have looked at the accounts for two years of Premier Lotteries Ireland. I will come back to that in a minute.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have looked at Premier Lotteries Ireland. I will come back to that. I am sure it has an advertising budget within that without going near the unclaimed prize money.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It would have. It has substantial administration. I will come to that in a second. Ms Boate has read the report of the Comptroller and Auditor General on the national lottery.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is she aware that the operator may have threatened the Comptroller and Auditor General legally to block the publication of the report? Is that correct?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. Apparently there are reports of that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. How long has Ms Boate been aware of the substantial unclaimed prize money of €20 million a year. Is she aware of that year-on-year?
Brian Stanley (Laois-Offaly, Sinn Fein)
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She is. Okay.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The terms of the licence are what they are but I find it strange that the regulator's office did not highlight this at any point in the past six years and try to change matters so that money would go in a different direction.
Ms Carol Boate:
The total amount of expired unclaimed prizes given to the operator to promote the national lottery did not come out through the report of the Comptroller and Auditor General. It came out through my office when it was released under freedom of information legislation. It is not in the accounts. This whole exercise has made the-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Would that not have been good information to have out there for the public who play the national lottery and fund it?
Ms Carol Boate:
It was put into the public domain because my office determined it was in the public interest that the value of these expired unclaimed prizes was known as it relates to the value of the licence. However, to answer the second part of the Chairman's question, if that money was to be given to good causes instead, there would be no budget, apart from the base marketing the operator is required to do, for additional marketing and promotion of the national lottery.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Hold on a second. The advertising for the national lottery is saturation advertising. The operator is not so short of money for advertising that it needs to get 98% of unclaimed prizes to do it. That is not a credible answer. I will come to the operator's accounts in a minute. It has substantial funding in respect of its operational costs. It is not credible that it would also need 98% of the unclaimed prizes of more than €120 million in a six-year period to do that. I have to disagree with Ms Boate on that. In relation to-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The UK has a population of 68 million.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have a population in this State of just over 5 million.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I concur with what has been said by other members regarding "shall" and "may". I and others are clear as to the meaning of "shall" when it is used in legislation, regulation or wherever else, whether at local authority level or national level. There is a public credibility issue in respect of the 98% and the 2%, with 98% being used on promotion, which is funding the saturation advertising campaigns that we see.
Brian Stanley (Laois-Offaly, Sinn Fein)
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You may. Go ahead.
Ms Carol Boate:
The licence states that the money must be used solely for the promotion of the national lottery in a manner determined by the licensee. That is the primary purpose of the funding. It then puts a restriction on it, which is that it, "shall include the funding of special draws ... and ... may include Incremental Marketing and advertising of the National Lottery ... or such other activities to promote the National Lottery".
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am aware of that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am aware of that but it is an extreme interpretation of it by any standard. There is a public credibility issue with it in terms of the information that is coming out here and has come out in the report of the Comptroller and Auditor General on the matter.
Brian Stanley (Laois-Offaly, Sinn Fein)
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You may, of course.
Mr. Derek Donohoe:
The Chairman was drawing comparisons with the UK, which is important. It is of interest that we look at those as well. They are very different financial models. Under the Irish licence, there is a requirement for the operator to have a budget for base marketing. Base marketing is the minimum marketing required to keep an awareness of the national lottery out there. In terms of incremental marketing, however, everything other than base marketing is incremental marketing and there is no provision in the licence for the operator to be funded for that, other than out of its own resources. In the UK, for example, the operator is funded out of the sales of its national lottery products for a marketing budget. It gets its marketing through a percentage of sales and a fixed amount. That has not been put-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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I ask Mr. Donohoe to hold that point over. I am going to come to it. He can come back in later. I take the point he is making, and I thank him for making it. I will come back to it later.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Deputy Carroll MacNeill is back in attendance and I want her to come back in. We have the answer about the numbers.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I am sorry that I was not here when Ms Boate was clarifying the number. Will she clarify it for me?
Ms Carol Boate:
That was actually a different number related to the lotto rollover. I am afraid we were not able, in the time available, to get the exact number of people who commenced a self-exclusion in 2021. We have quarterly and weekly reports and we can, through the examination of those, determine the appropriate figure and send it to the Deputy after the meeting.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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The regulator has it on a quarterly basis so it can just get those four reports, add them up and send them to me. Is that it?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Right. Can I ask about the 45 as a proportion who had been contacted. Is that a figure that caused significant concern to the regulator? Is it 45 out of 50? Is it 45 out of 500? Ms Boate must have some sense of the scale.
Ms Carol Boate:
It would be well in excess of 1,000 who would commence a self-exclusion. A self exclusion could be for one month, three or six months and some people might self-exclude more than once. It should be more than 1,000 or in that ballpark. I do not have the exact figure. Each quarter will vary.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Ms Boate will come back to the committee with that figure.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I agree.
Ms Carol Boate:
We have made sure that not only is the lottery not sending marketing emails, which is a requirement under the licence, but also that it does not send them even a player protection email, because that could inadvertently go about saying they had spent quite a lot of money in the past month and they may want to use the spend limit tools, nor is the lottery allowed to send them service emails about their account. No emails at all go to self-excluded players because any contact is inappropriate.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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That is literally the point I was making earlier. The failure when there was a breach was significant and important. The regulator noted it but applied no sanction and that is what concerns me.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Then I learn that no sanction has been applied in any case beyond the noting in an annual report which, forgive me, is just not that scary.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Ms Boate said there was a method by which the regulator could withhold funds. That is a sanction.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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It is important for us to understand the relationship between the regulator and the operator. When Ms Boate comes back, will she give us a sense of the number of times there has been a breach? She has spoken about the establishment of her office five years ago, so perhaps she can tell us how many times there has been a breach in the past five years. Ms Boate says she has considered the application of a financial penalty or exclusion or withdrawal in each of those instances. Will she give us that number when she comes back with the other number on self exclusions?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I will return to the whole shall-may thing. I am sorry to go back to it. It really is a difficult one for us and I will say why. Even looking at the children's referendum and the language around that, the words "shall" and "may" are constantly in debate on legislation. Perhaps as legislators we are overindexing, so to speak, on this point but it really speaks to us. Returning to the licence and how it is operated, I heard what Ms Boate said to the Chair. For the record, clause 6.9.2 of the licence provides that:
Any Expired Unclaimed Prizes shall be forfeited in favour of the Licensee, provided that such Expired Unclaimed prizes shall be used: solely for the promotion of the National Lottery and/or the Lottery Games ... in a manner determined by the Licensee, which shall include the funding of special draws and .... which may include Incremental Marketing.
I wish to ask about the regulator's oversight of the distribution of advertising generally and the scale of advertising. For example, would Ms Boate ever be concerned that media organisations might be reliant on the national lottery advertising funds as a proportion of their budget? I appreciate she would not have oversight but this is a significant annual advertising budget every year. How is it dispersed across broadcast and newspapers? Does Ms Boate have concerns about any of that?
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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That is fine. No problem. What proportion of that is the kind of advertising I am speaking about, which is the type that radio or newspapers might depend on?
Ms Carol Boate:
We do have oversight. In the two reports it sent us, the one on the base marketing budget for the year and the incremental marketing and promotion budget for the year of how it is apportioning its spend among different channels, it is not down, perhaps, to the level of operators such as RTÉ versus Virgin Media. As the Deputy said, it is "in a manner determined by the licensee", so I have no role at all in ensuring any particular apportionment. However, I do have a role in ensuring location, targeting and content. For example, outdoor advertising, which we have not mentioned much, cannot be within 100 m of a school. When it advertises online, we have age-gated that so that it can only target those over 21 years because, in a social media context, I do not think the age-gates are very reliable, so we increased the age from 18 to 21 years to take a more cautious approach. I do not have oversight of how much, but I am aware it is a significant advertising budget. I do not have information on how it compares with the broader Irish landscape.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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Fair enough. I do not expect Ms Boate to have that. I am interested in the indexing, from a media organisation's perspective, and what proportion. That is something for us to consider and part of our investigation is asking Ms Boate.
Ms Boate says she does not have the exact numbers because it is not in her authority. Returning again to persuasive authority, it appears to me there is a very strict reading of the licence. I suggest that the regulator has much greater authority than might be the case in the licence because of that persuasive authority. I think the regulator could ask for a breakdown of, say, how much was going to RTÉ, the Irish Daily Mail or Irish Independent. Ms Boate referred to positioning and targeting and how the regulator does have oversight of that. If there was an overindexing, so to speak, in The Clare Champion, for example, or another geographically based newspaper or a newspaper that catered or targeted itself towards a particular demographic, would that concern the regulator? Would she look for information on that basis so that she could understand positioning more broadly in the market?
Ms Carol Boate:
That is a good question. We do have oversight of figures and the split. It may change in time since advertising will follow the eyeballs, so to speak. If we were to delve down more deeply into which newspapers, channels and so on it was being spent on, that might be as part of a compliance review. We do proactive compliance reviews every year. We take an aspect of the business and delve deeper into how the operator makes sure that aspect works properly. An example would be if all the newspaper advertising was in newspapers that tended to be read by one group in society more than another or the positioning of the advertising. From time to time, we do these targeted compliance reviews where we take a deep dive. What the Deputy described could form part of something like that if we were to check about the targeting of advertising.
Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank Ms Boate. If there is content from our engagement at this forum, which I appreciate is a very different sort of forum where we are coming to the issue from many different angles, can that be followed up in next year's compliance?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have established a number of things. None of the unclaimed prize money of €121 million-plus over a six-year period went to good causes or into the community. We have established that 98% of it was used for advertising and just 2% of it was used for extra prizes.
We have teased out the words "shall" and "may" and highlighted the problem in that regard. Based on the figures that were given, I found out that 28% of "gaming revenue", which is the term used, goes back into the community via the various organisations and good causes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. I thank Ms Boate for the clarification; 28% of sales goes back to the community. It is rolled over 61 times. I thought it was 51.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That highlights a significant problem.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The €19 million.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have also discovered that the operator came up with the idea of putting in the extra balls.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was the operator's decision. I feel that a lot of the €120 million, which was the money from the extra draws, should have gone to good causes but I was surprised when I saw that in fact the figure was only 2%. When we look at the balance in terms of advertising and PR, which is another way of promoting the lotto, one would imagine that the extra draws would be an incentive for people. Does the regulator not find it odd that the operator came to the conclusion that 98% of it should go into advertising? Is the answer “Yes” or “No”? Does it sit easy with Mr. Donohoe?
Mr. Derek Donohoe:
In answer to your first question, Chairman, on whether I find it odd, I do not find it odd because the operator is operating in its commercial interests. The operator is looking at the clause in the contract between it and the State. Clause 6.9 states that it shall determine how it uses that money “solely for the promotion of the National Lottery”.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Does the office have concerns about gambling? We know that there is a problem with gambling addiction in this country and that it is currently increasing. There are serious concerns in that regard across various Departments, society and the health service. Does the regulator's office have concerns about the advertisement saturation that exists? Has there been any communication with the regulator on the recent extreme level of advertising or has it ever been discussed?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I accept that is the case with the role, strictly speaking, in a legal sense, but most people feel it would be helpful if the regulator had that role. The problem I have with this is that the first time it landed on my desk was in the Comptroller and Auditor General's report. Previously, I was not aware of any of these issues. How did we get to this position? There are some extreme interpretations of how this should operate. I find it difficult to comprehend that but for the Comptroller and Auditor General's report, as Chair of the Committee of Public Accounts, I would not be aware of it. That is the case with the public as well. We need a regulator with a bigger role.
Ms Carol Boate:
Thanks to the Comptroller and Auditor General’s report, I have been considering if there is a way of making the figure expended under advertising for the year auditable, which would mean the amount could be published each year. It is not visible in our accounts because it does not go through the accounts of the fund in that way and it is not visible in PLI's audited accounts either. As the Comptroller and Auditor General mentioned earlier, that is because it moves from PLI's bank account to the operator’s account to spend onwards. There is not visibility of the figure for that reason. Even though I put it in the public domain each year, it has not been in a formal set of accounts. I put it in the public domain under a freedom of information request because it is in the public interest within the meaning of that legislation. It does tell the public about the value of the licence and how much money is being spent on promoting the lottery. To clarify, it is more than advertising and marketing. For example, the company has come up with different initiatives over the years such as the good causes awards, which is a pure marketing campaign to raise awareness of some of the ways the national lottery money is spent, and that has been funded out of this fund.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Ms Boate.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I apologise for being late. I also apologise if I ask questions that have been asked. I have been coming in and out and I following the meeting on the monitor. What is the staff profile of the regulator’s office?
Ms Carol Boate:
There are 11 staff, including me. Mr. Donohoe is the head of audit and finance. He is a chartered accountant with 40 years' experience, and we have another full-time accountant and a part-time finance officer.
The head of legal and compliance is a qualified solicitor with a background of many years of private practice and public sector enforcement. He is assisted by a compliance manager with similar qualifications and background.
I also have a head of player protection. These are all at the same level because they reflect the three key aspects of the framework. She is a chartered psychologist with a background in research with a particular interest in problem gambling. She is able to research aspects for me and advises on measures to protect players from problem gambling, and on other protections for players. We also have corporate services staff to support the office.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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How many members of staff are in that section?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Is the regulator's role to recommend or direct the national lottery to do things differently? Is that correct terminology?
Ms Carol Boate:
Most of my role is around ensuring compliance with the terms of the Act and the licence. We monitor issues such as player protection closely. Certain parts of the licence are intended to evolve over time. We mentioned the advertising code earlier. Player protection is another one. There is a very general clause that the operator must operate with responsible gaming practices and prevent problem playing. That is intended to evolve over time as research and learning and technology changes. In those areas, I tend to have a more direct and more persuasive role.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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For example, in 2021 and to date in 2022, how many directives has the regulator issued to the national lottery?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The question I am asking is whether Ms Boate suggests or directs.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Has that power to direct been used this year so far?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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When was it last used?
Ms Carol Boate:
I cannot remember if I used it last year to fix the issue or if the national lottery had already fixed it by the time I found the breach. I cannot remember off the top of my head. The power has been used following breaches to direct them to comply or to fix something, but I cannot remember, I am afraid, exactly when the last time was.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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We deal with a lot of regulators at this committee. I am thinking of bodies like the Standards in Public Office Commission, SIPO, and others. Many, if not all, in their annual reports highlight what they consider to be failures or lack of powers they have in order to do things differently or to improve practices. There has been a lot of debate on the issue of the unclaimed prizes and how that funding is spent. I know that Members have asked questions about the "may" and "shall" aspect of that. If I am correct, Ms Boate's view is that the operator is within its rights to use almost all that money, essentially, for its own administration or marketing costs. Is that the case?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is 2%. It is as minimal-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Ms Boate says she has released that through a freedom of information request. Why did she never highlight that as a problem in terms of the operation and what is clearly a failure of the legislation?
Ms Carol Boate:
I released the overall amount. The 2% figure was released under the Comptroller and Auditor General's powers. It is a problem if the State is not happy with the way the licence is operating in practice, but my understanding is that the intention of the parties was to create an advertising budget that-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Of which parties?
Ms Carol Boate:
The parties to the licence are the State that is, the Minister, and the operator. In signing this, the intention was that they would be given this ring-fenced money to spend on promoting the national lottery. As I said, that is common in lottery licences internationally. My understanding is that that is their intention and that it would be at the discretion of the operator. Maybe it is because we used to have a system whereby expired unclaimed prizes were used solely as top-up and additional prizes and we have moved away from that, but they seem to have wanted to keep some aspect of that tradition. My understanding is that that was actually the intention of the parties and that they are not doing anything that was not the intention of the State when this licence was signed.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The Department of Public Expenditure and Reform, I presume, is here representing the State. Was it the intention of the State when we privatised the national lottery that unclaimed prizes would go to a marketing slush fund?
Mr. Dermot Nolan:
I do not know exactly. I was not around at the time. The legislation and the licence are about seven years old, so I cannot speak with confidence about what the intention was, but if the clause of the licence allows for that, then I presume that that was actually the intention at the time or that that-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If we take it at face value that the clause allows for it, does the regulator consider it appropriate for it to continue to operate in that way?
Ms Carol Boate:
It is appropriate that there is a specific promotion and advertising budget in the licence because, otherwise, there will not be sufficient advertising promotion of this asset throughout its lifetime. If we were to get the end of the licence, the last five years of the licence say, the operator could just spend the base marketing that is provided for in the licence, which is telling people in store where they can buy national lottery tickets and telling them about the lotto jackpot. Obviously, they have to advertise every-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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However, prior to the privatisation of the national lottery, there was always advertising and marketing. The national lottery was always one of the most recognisable brands in Irish society. The difficulty now is that when prizes are unclaimed, 98% of that money is used for this purpose now. The irony of it is that that marketing then implies that 90% of all expenditure that customers make on their lottery tickets goes towards good causes or back to the community, when that is actually factually incorrect. A large portion of it is actually going into the very advertisement that is telling us that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Earlier in the meeting I got this clarified. Between 27% and 28.5% goes back to good causes and organisations. The figure that has been given takes in prizes and the 6% that goes, rightfully, to the retailers and shops that sell the lotto tickets. When the prizes and so on are stripped away, it is actually around 28%. Continue, Deputy.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am aware of that. In a nutshell, what I am asking is why Ms Boate does not make any recommendation on this. She clearly accepts that there is no difficulty with 98% of this money going into an advertising budget. Is that so?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Let me clarify again. The regulator produces an annual report. As the regulator, Ms Boate is entitled in her annual report to highlight potential deficiencies within the legislation. We are dealing with a situation that we know about purely because the Comptroller and Auditor General did Ms Boate's job and highlighted to us that there was what I would consider a scandalous anomaly whereby a company that was privatised is using unclaimed prizes, unbeknownst to the public, to advertise back to that same public. I do not know why Ms Boate has never raised that as an issue that needs correcting within the legislation.
Ms Carol Boate:
It is in the licence, and my office did publish the licence, subject to some very small redactions, when we had that role in doing so. It has been in the public domain and it was my office that put into the public domain the amount of money that was being given to the operator every year.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Ms Boate did that through a freedom of information request.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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A freedom of information request involves somebody seeking information that has not been made publicly available. Ms Boate therefore did not make the information publicly available; she was forced to do so.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Let me ask Ms Boate this. Had the regulator not released that information under the Freedom of Information Act, would it have been in breach of that law?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The regulator has therefore made the information available because it was obliged to do so.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It did not make it available because it decided that this was something the public needed to know.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is therefore not thanks to Ms Boate that we know this; it is thanks to the people who made the freedom of information request.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Somebody has the-----
Ms Carol Boate:
No, not under freedom of information. I mean that, more generally, there is a whole series of things it spells out such as publishing the licence and what I can publish, and they put those in my annual report or on the website or the accounts. Then it is very clear about what I cannot publish, and it is not in the interest of the national lottery for me to breach the terms of the licence as regulator.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Would the regulator have been in breach of the licence were it actually to provide the information the Comptroller and Auditor General provided us-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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-----that only 2% was going back?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That would have been in breach of the licence.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Would Ms Boate not have ever considered that that is a problem in terms of public disclosure? The regulator is frustrated, under Ms Boate's reading of the legislation. Would she not have highlighted that in an annual report to say it is something that needs to change because the public have a right to know this information and she feels precluded from providing it?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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With all due respect, I am still trying to figure out what exactly Ms Boate's job is and what is the regulator's role. We have learned that the regulator does not issue directives and publishes information if it is in line with the freedom of information request. There are elements of the legislation that prevent the regulator from publishing what I would consider to be information that is very much in the public interest. The regulator never highlights any of these issues in its annual report and it never, or very rarely, issues any directives to the national lottery. We also have this situation where ludicrous - I would say obscene - amounts of money are spent on advertising that promotes a false perception to members of the public that 90 cent of every euro they spend is somehow going back into the community, when that is simply not true. What precisely is the role of the regulator in protecting those people who are spending their money buying lottery tickets on a weekly basis?
Ms Carol Boate:
The role of the regulator is fourfold. First it is to manage and control the National Lottery Fund. Second, it is to consider the changes to schemes of national lottery games or new national lottery games, and certain other matters such as new suppliers, for approval and pre-approval so that they comply with the Act and the licence. The other part of the regulator's role is to monitor and enforce compliance with the licence. Finally, we also have a role in enforcing the trademarks of the national lottery. As part of the management and control of the National Lottery Fund we prepare the annual accounts for that fund every year and submit them to the Comptroller and Auditor General for audit. Each year I am obliged to provide those audited accounts to the Minister and to accompany that with a report on the activities of the office. Included every year are any breaches that were found, details of the proactive compliance reviews that we conduct such as the capacity capability of the operator's IT systems to run the national lottery properly and to protect it in terms of cyber security. There is a particular aspect I must also describe in my annual report about the on-line player protection measures that are in place and how they are operating.
Every time I meet the Department they ask me if I need more powers. That is the standard question-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The regulator has never sought new powers. All of what Ms Boate has just said is just her reading out her terms of reference. I have missed some of this meeting but to my mind and in any of the interactions I have seen, Ms Boate has not set out in any meaningful way how the regulator actually protects consumers and takes proactive measures to ensure the reputation of the lottery system whereby people who purchase tickets are protected. Any measures that have happened in terms of public responses have come from elsewhere. The Comptroller and Auditor General has been mentioned. It was Members of this House and members of the public who raised the issues relating to the change of rules and the additional balls being added. There was the huge battle about the roll-over. It was this House that carried out the scrutiny, as far as I can see. Section 38 of the National Lottery Act, empowers the regulator to appoint someone to conduct a general overview of the system. The regulator did not do that.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is not what I am asking. It is with regard to the management and procedure and whether or not the mechanisms being used are actually fair. That did not happen.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Yes. It was the national lottery itself that announced there would be a must-win draw or draws in order to-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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-----end the cycle.
Ms Carol Boate:
That is not a mechanism. We do make sure. For example there has never been any change to how a national lottery draw is conducted. While it is not conducted in exactly the same way as it was in 1987, it is conducted in exactly the same way as it was in 2014 when my office commenced. I have visited the lottery draw to see how it is done, and KPMG's presence there-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am not talking about the practicalities of drawing the balls out of the drum.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The national lottery changed the game to make it, essentially, more difficult to win, which is what it did by adding in an additional two balls, and then it proceeded simply to have jackpots not won for long periods of time. It changed that system by introducing must-win draws, but it did that at the behest of public pressure coming from this House and elsewhere. It was not from any intervention by the regulator's office.
Ms Carol Boate:
It did that only with my approval to check. Yes, it did change the game and it made it harder to win because if it is harder to win there are more roll-overs and then there are higher jackpots. There was that very unusual set of circumstances whereby it had rolled over. It is extremely unlikely but it does happen with lotteries where it can roll over for such an extended period of time. My first concern was that players did not seem to understand what was happening with the prize money, and it went on and on. Obviously, there was a concern that the players would start to be concerned about it being won. I knew that the operator was considering applying for approval to change the rules of the game to make it a must-be-won. To do that, one must change the technology of the system and one must also introduce a whole suite of checks and balances to make sure it works absolutely correctly on the night. Once I approve a change to a game it stays there forever so I need to be sure it will work exactly right every time in the future. In that case, I did not need to suggest to it that it look into it. Of course we all thought it would be won. The odds of it continuing to roll like that were very, very extreme, but it did nonetheless. My role is in making sure that-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was the changes that were introduced which made it more difficult. That is the point the Deputy made.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can we just clarify a point? I listened carefully to Ms Boate as she outlined the powers that she has. She has revisited these again in the last few moments. Ms Boate must approve any changes to the game. I asked the question earlier about the two balls being added. Did Ms Boate approve that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Did the office approve it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who approved it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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When did this happen?
Brian Stanley (Laois-Offaly, Sinn Fein)
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In which year did this happen?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will just bring in Mr. Nolan from the Department of Public Expenditure and Reform. Was the Department in the loop about the two extra balls being added?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The advice to the Minister was that this was okay. At that stage the Minister was the regulator.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was the Minister of the day who approved it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will continue with some questions and we may also have another Deputy popping in, or we may not.
On the breaches of the licence, how many times has the licence been breached since the regulator's office came into being in 2014?
Brian Stanley (Laois-Offaly, Sinn Fein)
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How often does it happen? Is it once or twice a year?
Brian Stanley (Laois-Offaly, Sinn Fein)
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At most.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is probably an average of once a year.
Brian Stanley (Laois-Offaly, Sinn Fein)
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If Ms Boate was to pick out one as a major breach of the terms of the licence, what was it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. I wish to return to the issue of the advertising budget. When speaking about the advertising budget Ms Boate indicated that the 98% of unclaimed prizes was useful and went into advertising. I do not wish to misquote Ms Boate but basically she indicated that otherwise all the operator would have was the baseline budget for advertising. What is the baseline budget for advertising for the operator? Is there a percentage?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are the dividends going back to the shareholders covered under the licence?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. There is nothing there.
Is the regulator aware that there was a 9% loan by the operator from its parent company during the period.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was it aware that the interest rate was 9%?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was it aware that loans were available at or below 1% during that period?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Loans were available at-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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There were loans available at 0.25% but 1% was a general figure during that period. Does it strike the witnesses as odd that a loan was taken from the parent company for 9% when money could easily be borrowed for 1%?
Brian Stanley (Laois-Offaly, Sinn Fein)
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If I want a loan to build an extension to my house and can get it at 1%, why in the name of God would I borrow it at 9%?
Mr. Derek Donohoe:
Because the shareholders are looking at what equity they are going to put into the company and the company is funded by a mixture of capital coming in. The capital comes in as share capital, bank borrowings and shareholder loans. The benefit of a shareholder loan is that it can have a coupon in interest on it so money can be earned by the shareholder as interest on its loans to the company.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The real benefit is that the parent company would receive 9% interest every year.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is accumulating there.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In the accounts of Premier Lotteries for 2017 and 2018, I note the gross profit was €70.2 million in 2018 and €70.4 million in 2017. It had administration expenses of €65 million and finance costs of €35.2 million in 2018, so the company ends up with a loss of €30.7 million. We have to assume advertising is included in those administration costs.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Finance costs are €35.2 million for that year. Those would seem fairly generous figures. Do the witnesses agree?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It appears from the consolidated statement of accounts that a substantial loan was taken out by the operator from its parent company at an interest rate of 9% and a substantial amount each year is going to paying that back. It has been capitalised. I accept that. That is what is happening.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is important that we know that. That loan was in 2014 and we have ascertained that An Post has a 10% shareholding, An Post Pension Funds has 10% and there are two other parties involved, one a pension fund for Ontario teachers and another that was mentioned this morning.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are the two An Post ones.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. Ontario Teachers' Pension Fund is doing very nicely out of this.
Mr. Derek Donohoe:
I do not know that it is doing very nicely out of it. It is running a commercial operation whereby it invested €405 million to acquire a 20-year licence. The commercial terms of the licence are set out in the licence. Its capital structuring and how it determines it will produce profits, which could be extracted by way of dividends or by charging interest on loans because that is the way it structures its balance sheet, are commercial matters for the operator.
Brian Stanley (Laois-Offaly, Sinn Fein)
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If I was a member of that pension scheme, I would be fairly happy. The pension scheme is performing very well.
Brian Stanley (Laois-Offaly, Sinn Fein)
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If you calculate what is going in on interest on the loans, there is a couple of hundred million there.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is closer to €200 million.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In 2015, it was €15.7 million; in 2016, it was €17.3 million; in 2017, it was €18.8 million; in 2018, it €20.6 million; in 2019, it was €22.6 million; and in 2020, it was €24.7 million. The investment in the national lottery is performing very well for members of the pension scheme. There is substantial money there. The borrowing is at 9%, which seems an extremely high rate.
Is the Office of the National Lottery Regulator aware that in 2017, according to the figure I have on which I am open to correction, an €84.6 million dividend was paid to shareholders?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is the Department aware of it? If the figure of €84.6 million is incorrect, the witnesses might come back to the committee. If it is correct, they do not have to do anything.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Mr. O'Donohoe outlined the rationale for the loan arrangements from the perspective of the company. From the perspective of the regulator, is there an issue with that mechanism of taking out a loan with an interest rate nine times above what is available in the market?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If the interest rate was 20%, 30% or 40%, would that not be of concern?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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At what percentage would it be appropriate for the regulator to make an intervention?
Mr. Derek Donohoe:
There is no set figure. We review the financial statements of the operator annually and we look to see it has the appropriate controls in place and that the auditors are satisfied. We get a report from the auditors specifically to us on the controls in place. Then we look at the financial statements to see if those statements create concerns for us with regard to the financial viability of the company. We look to see if Deloitte, the auditor of PLI, has raised in its report any concerns with regard to financial viability. The accounts are all prepared on a going concern basis-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is on the basis of financial viability, so as long as they do not bust the company, they can waste money. Is that the situation?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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As the Chair has said, if you take out a loan at a rate of 9% and a much lower rate was available, you are essentially wasting money.
Mr. Derek Donohoe:
I think the issue is that there is a capital structuring, which is a matter for the operator and the shareholders. They have structured the company. To follow the logic, they could have provided all the moneys by way of loans, provided a higher interest rate and wasted more money, but that is not what they have done. They have chosen to have a mixed-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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They could have.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Does Mr. Donohoe not see that as a difficulty in terms of the structure that is in place?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay. The regulator does not see itself as having a role in the prudence of expenditure but just in the viability of the company.
Mr. Derek Donohoe:
The prudence of expenditure of the operator is a matter for the operator. We are not concerned with the operator's administration costs, where it chooses to spend money and how much it decides to pay its employees. We are concerned with making sure the operator is financially viable in order that the long-term sustainability of the operation of the national lottery can continue over the life of the licence.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I find it an extraordinary statement that Mr. Donohoe is not concerned about the prudence of the expenditure and does not see any difficulty with that.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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As it affects-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I will have to come in. There is a very specific question. If a regulator is overseeing a body that spends substantially more on any given product or service than is available on the market, I would consider it as part of an A, B, C of regulation to draw attention to that and at least question it. The evidence the regulator is providing here is that unless this actually creates an existential problem for the company in itself, the regulator does not have a role.
Ms Carol Boate:
Creates or threatens. We would not wait, as you might say, until the writing was on the wall. If something is not provided for in the Act or licence, I have no jurisdiction to get involved in the operator's business of how it pays it employees or how much it wishes to spend on redecorating its offices. Its inter-company arrangements on how it finances and extracts the value that it has invested at the start-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Essentially, Ms Boate has said that by privatising the national lottery, we have created a cash cow. These guys have free rein. As long as they actually stay within the middle of the ditches, they can go on whatever street they want. The regulator has just said an operator can spend as much, essentially, as it wants on anything regarding administration, loan costs or whatever the case may be.
Mr. Derek Donohoe:
It is a private commercial operator that is operating on a for-profit basis and looking to make a return for its shareholders. That is what the directors are charged with doing and that is exactly what they are doing. Nothing was laid down in the licence or the Act that there must be a minimum amount of capital, or that the capital funding must all be in equity, or that there should be a mix of shareholder borrowing or bank borrowing. These are all matters for the operator to decide and the operator has decided them. We have oversight of the results of the operator, oversight that it has its audits complete and oversight of its financial viability. We are doing all that.
On the operator taking out as much money as it wants, if it takes it in interest, that interest comes out and then creates losses. It is-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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At the end of the day, the interest is actually going back to the parent company, in this instance.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is why there is a fundamental question over the prudence of that move. The operator is paying way above the market rate but doing so in a way that the people who profit are those in their own parent company, that is, its own shareholders. It is managing to do two things. It is taking money out of the company but benefiting the beneficial owners of that company through a mechanism, when it could have actually got a much more value-for-money service.
Mr. Derek Donohoe:
If the operator had got a lower interest rate on the loan, it would have flowed down into an improved bottom-line position, which would then have allowed for higher dividends. It is about the manner in which the shareholder gets a return on its investment, which is a combination of dividends and interest. That is a matter for the company to have decided.
Ms Carol Boate:
I will say to the Deputy that it is probably useful to understand that I spend more time making sure the operator is spending enough money on things. I do not want it reducing the amount of money it spends on aspects of running the national lottery. Sometimes, I am getting it to spend more money to make its systems better.
For example, there was an incident this year where a few lotto advertisements for the jackpot had stayed out in the Internet ether for a little longer than the draw. That is not good enough and it is not appropriate. It is more challenging to advertise reliably on the Internet, particularly when it is for a product that changes every three days, but it is up to the operator to make sure it has systems and controls to deliver that. At that stage, I demanded that the operator provide me with a demonstration of how it was going to improve its controls and have appropriate systems in place. It commissioned an external firm that specialises in auditing media to do an audit of its systems and controls, and those of the third-party supplier it uses to buy media and advertising. The operator gave me a report on that, including the recommendations and the progress on implementing them. That has already yielded some changes in that the operator now has more checks and balances in place to make sure that does not happen, which has slowed down its advertising in terms of how quickly it can get its advertising out. That is good because it is being done in favour of reliability. The operator does not advertise on all platforms but a couple of the major ones have given them an account manager, which I understand is highly unusual for an Ireland-only company, to improve the reliability of advertising online.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is probably an indication of how much it is spending on advertising as much as anything else.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If that is the big achievement of the year, that the regulator has managed to call up the fact the operator was advertising a jackpot online the day after the jackpot had been won, it is minimal in terms of the-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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-----bigger issues that have been raised at today's meeting for which no action has been taken.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Has the regulator ever done that?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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When was the last time the regulator refused a game?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Has it been done this year?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Maybe if we put in a freedom of information request, we will find out.
Ms Carol Boate:
The operator can amend the request to deal with any queries or objections I have. That happens quite a lot. For example, the game I rejected, which came in later as a new request, was a changed lotto plus in, I think, 2018, where the operator wanted to change the price structure in a way that would have doubled the number of free tickets. The Act states that the form and value of prizes is purely a matter for the operator so it is usually an area I do not get involved in but, in that case, it would have doubled the number of free gambling opportunities. From a player protection point of view, I said that was not in keeping with the licence and rejected the game on that basis. The operator came back later with a new version of lotto plus, which was subsequently approved. It is not a direction but it is a way of intervening.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I apologise to the Chair for going off on a tangent. I agree that additional free tickets create a player protection issue but would free tickets, as a principle, not create the same issue? Should we not withdraw them entirely?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Before we conclude, we have clarified that the introduction of the two extra balls did not happen in Mr. Nolan's time. It was approved by a Minister. Am I correct?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes. I ask Mr. Nolan to check and revert to me on that.
When does the term of the licence expire?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I just wanted to clarify that point. That concludes the questioning of the committee.
I thank Ms Boate and Mr. Donohoe for attending, and their officials for their assistance. I also thank Mr. Nolan from the Department for preparing for today's meeting and for the information it supplied both prior to and during the meeting. We have covered a great deal of material and I am much wiser about the national lottery than I was. I also thank the Comptroller and Auditor General and his staff for assisting the committee today.
Is it agreed that the clerk to the committee will seek any follow-up information and carry out any agreed actions arising from the meeting? Agreed. Is it also agreed that we note and publish the opening statements and briefings provided for today's meeting? Agreed. There is some follow-up information, which I would ask to be provided to the committee. The Committee of Public Accounts is suspended until 1.45 p.m. when we will resume in public session to address correspondence and any other business.