Terence Flanagan (Dublin North East, Fine Gael)
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The Bill provides for the national lottery licence to be sold to secure an upfront payment to help fund other much needed areas in the economy. The current licence operated by An Post expires at the end of June 2013, with the licence competition expected to open in the spring of this year.

The total revenue generated by the sale of a 20 year licence could be anywhere in the region of €400 million to €600 million. The awarding of a new licence will generate funds to benefit the community and allow for construction of the new children's hospital to begin. Without such revenue, it would be difficult to meet the financing requirement for this important and long overdue project with Exchequer funding alone. The sooner this project gets started, the better for all of the country's children. Hopefully, it will also create thousands of new construction jobs.

Nearly €4 billion has been raised through the national lottery for good causes since it was founded in 1986, with €1 billion of that generated in the past five years alone. In 2011, almost €232 million was raised for good causes, with nearly one third of every €1 spent with the national lottery donated to good causes around the country. This money has been distributed by the Government and many thousands of people and organisations have benefited as a result. Under the terms of a new operating licence, it is vital that the national lottery continue to thrive and to allocate money to those who need it the most.

Although the percentage of funds to be discharged to good causes is not referred to specifically in the Bill, section 41 requires that money be paid to good causes in the same categories as has been the case to date. The lottery should continue to support good causes and allocate substantial sums of money in line with current levels. Some 30.5% goes towards projects in the categories of youth, sport, recreation and amenities, health and welfare, and arts, culture and heritage. It also goes towards the promotion and survival of the Irish language, a matter that is close to my heart. The Minister of State, Deputy McGinley, who was present earlier, is working hard to ensure the survival of the Irish language and that this money is used correctly.

The lottery is increasingly popular. I am sure that all Deputies play, particularly when the prize money is at a high level. Despite our recent economic difficulties, considerable sums are being allocated to good causes. In 2011, sales amounted to more than €761.4 million. While this represents a decrease of 1.4% compared with 2010, it shows that sales remain robust in these difficult times.

The Minister has been working with Davy Corporate Finance to finalise the exact nature of the competitive process for the licence and the sale's associated timelines. Officials from the Department of Public Expenditure and Reform have been holding meetings with domestic and international parties that are interested in bidding for the licence. One reason for the high level of interest is the lottery's success since its inception.

I understand there are concerns about the sale of the national lottery licence, but it is vital that we generate revenue now. Now is when the money is most necessary, particularly if it is to be allocated to needy causes, including the construction of the national children's hospital. The delays in getting the children's hospital project off the ground are regrettable. Once the money becomes available, it is important that construction work get under way as soon as possible. When the Minister wraps up, will he provide further detail of the other projects to which money will be allocated?

It is important to remember that the asset of the national lottery itself is not being sold, only the licence to operate that asset. This should reassure those members of the public who have major concerns about its sale. With this in mind, I welcome the establishment of an independent regulator to ensure the interests of participants in the national lottery are protected. The regulator will also have the important task of ensuring allocations to good causes are maintained as far as possible so that they can continue doing their great work. Calls have been made for greater transparency and accountability regarding which projects receive allocations. The appointment of a new regulator should help to allay any concern in this respect among members of the public.

It is hoped that the selection of a bidder will be finalised later this year and that the 20 year licence will commence next year. An Post has operated the licence since the lottery was established and has done an impeccable job. When the chairman of the National Lottery Company, Mr. Donal Connell, appeared before the Joint Committee on Finance, Public Expenditure and Reform, he highlighted An Post's interest in bidding for the new licence, given that company's brilliant track record. It is important that whoever wins the licence, if it is not An Post, should continue that company's legacy and maintain the success of the national lottery.

The lottery in the UK has been run successfully by Camelot, a private company owned by the Ontario Teachers' Pension Plan, for almost two decades, with the licence coming up for tender at regular intervals. Camelot is licensed to operate the lottery for a third term until 2023 and the company's chief executive, Ms Dianne Thompson, has stated that she manages a high-profile national institution for the public good, with 28% of total sales donated to good causes. This example proves that a private company can work in the interests of the Irish people while operating the national lottery and continue in the same vein as An Post.

The Artane Boys Band of my constituency is famous for its many appearances at Croke Park, particularly for All-Ireland finals. As a former member and loyal supporter of the band, I know it has been supported considerably by the national lottery. Without that help, it would not survive. I congratulate the national lottery in this regard. Many Deputies would have similar stories from their constituencies of projects that owe their success to the good causes fund. Long may this continue.

I welcome the Bill. I am sure that whoever is selected will be the best operator, will have the best interests of the Irish people at heart and will ensure that funding continues for good projects through the country, as they would not survive without that money. I assure the public that the new regulator will ensure greater transparency and accountability regarding the funds used in this way.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I will speak in favour of the legislation and welcome its introduction. Before I refer to it, though, I will discuss the origins of the national lottery. Its establishment was not without political opposition in the 1980s. I acknowledge the role played by a Deputy of many years who was also a Minister of State, Donal Creed. He brought to the then Cabinet a memo on the establishment of a national lottery. He was a Minister of State at the Department of Education with special responsibility for sport.

I remember because a photograph of him is still in place where I used to go to school to commemorate the opening of an extension by him at the time. It was a move that was opposed by many at the time, but as every speaker to the legislation has pointed out, the national lottery itself has been a tremendous success, in particular in terms of the funds raised. It is not just a question of funds that have been raised and distributed to sporting organisations, which are important and have been most welcome, but also funds distributed to groups such as those to which Deputy Terence Flanagan referred, in addition to health care providers, which have provided much needed facilities in my own part of the world such as respite for families of children with autism, for example. The latter group is based in Waterford and covers Waterford and south Kilkenny. The effects of the national lottery have been most positive in that regard.

The purpose of the legislation we are discussing this evening is to allow for a new licence for the lottery to be published, allowing for new terms and for a new competition to take place. The Government’s freedom as to who administers the lottery is affected in the sense that it must be a full public process and cannot be limited to the State or an agency of the State, as was the case heretofore in terms of the operation of the lottery.

Opposition Members have said that is bad. I disagree. It is a positive development that an open competition will be held for interested parties to tender for the future provision of the national lottery. I was also struck by the number of Members of the Opposition who spoke in support of the lottery and its good causes and effects, but decried the fact that it promotes gambling. They cannot have their cake and eat it. It is either one thing or the other. One can look to examples around the world of services provided as a result of moneys gained from national lotteries. The experience worldwide has mostly been positive. That is not to underestimate the difficulties posed by gambling and the addiction to it for individuals and families in this country and elsewhere. By any measure the national lottery has been successful in the objectives set out in its initiation in the National Lottery Act 1986.

The Bill aims to provide a legislative framework for the operation of the lottery, protecting and safeguarding the integrity of the lottery and the establishment of a regulator to ensure that whoever wins the competition adheres to the principles which were enunciated in the original legislation in 1986, that the lottery would be run for the benefit of the people and causes in communities right across the country. That is something I fully support and welcome.

I also support the point made by Deputy Terence Flanagan about the terms of the new competition. The current national lottery scheme stemmed from a competition dating to the turn of the millennium. We have had previous competitions. In the future the competition will be more broadly based and will give the opportunity to the Exchequer to get an upfront payment of a substantial amount for, as Deputy Terence Flanagan outlined, the provision of the national children’s hospital, which could only be considered as positive and has been sought by many Members of this House previously. I would welcome such use of lottery funding.

I will conclude by outlining the often maligned position politicians have and point out that it was a politician, namely, Mr. Donal Creed, who is still hale and hearty, whose brainchild was the development of the national lottery. Thanks are due to him that the initiative has proven such a success.

Joe McHugh (Donegal North East, Fine Gael)
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I acknowledge the good work the national lottery has done in the past. A total of €12 billion has been invested in various areas over a 25-year period. Many areas have benefited, such as Carrigart, Clonmany, Carrickmacross and Castlecoote. Money was distributed to many areas that otherwise would not have got such benefits.

According to the Minister, there is a need to tender for the outsourcing of the licence but it is important to ensure that we enshrine in the legislation that good causes will benefit. Some might argue that the model that was previously in operation was used by politicians to buy votes but the contrary was the case. It was an exercise in local democracy in action where local politicians were in touch with their constituency base and realised that there were small parishes and areas that would not otherwise have funding to build a new sports centre, an extension onto a sports club or to provide a community centre or service. Politicians are the ones who ensured that the €12 billion was spread out as evenly as possible in their constituencies and fought tooth and nail to ensure that would happen.

We should not avoid the rationale behind the positive functioning of the lottery system. One could ask why such a mechanism was required. One could point to the centralising of Exchequer funding and the priority given to larger projects for worthy needs such as hospitals, the provision of bigger roads, sewerage schemes and water schemes. The bulk of funding goes to core areas where population centres are concentrated. There is a constant fight in rural areas for funding that would not otherwise be available to them. It is important in the context of a debate on the lottery to examine the reason rural, isolated areas are always fighting for the crumbs of its share of the pie.

I could always argue the toss in my county which historically and traditionally had less investment than other parts of the country in terms of national distribution. One only has to look at the motorway systems between Dublin and Galway, Dublin and Limerick, Dublin and Belfast and Dublin and Cork. Each of those cities also has a rail service. There is a national psyche in terms of peripheral areas losing out to core areas. I use the example of my county, but when one brings it to a micro-level, in every county, including populated parts of Deputy Terence Flanagan’s constituency, areas are losing out on investment. Unfortunately, that is the world in which we are living. We must continue to ask why. We must examine the current banking system. I wish to allude to a report compiled by Dr. James Deeny a number of years ago when he worked as a locum doctor in the Fanad Peninsula.

He argued that, in that geographical area, there was upwards of £1 million on deposit at that time in the 1970s. He asked how that money on deposit was working for the area and he argued that the banking system operating at the time was using that capital as collateral - as liquidity - to attract further investment into the bigger areas. We should use the opportunity of this debate to discuss the way our government system and banking system are working for the rural areas, as there is a constant drag on capital out of areas, and how we can make our money on deposit in rural areas work for the people and the communities.

I have reservations about the awarding of this licence to an external source but I ask the Minister to examine all the suggestions from both sides of the House in terms of enshrining the good cause element in it. That is a priority.

Joe Costello (Dublin Central, Labour)
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I thank the Deputies for their contributions to this debate. The Minister, Deputy Howlin, who unfortunately cannot be in the House, is conscious of the high regard in which the national lottery is held by the public. Many of the issues raised by Deputies reflect their wish to ensure that Ireland will continue to have a national lottery which is based on integrity and propriety and which takes account of its responsibility to operate in accordance with the public interest.

Deputy Fleming has urged the Minister to ring fence the proceeds from the award of the next licence to ensure the money is safeguarded for the building of the proposed national children's hospital. He has also suggested that perhaps the payment for the licence could be received in instalments over a number of years. The Minister, Deputy Howlin, is concerned to ensure that funding for the national children's hospital will be available at the appropriate time. He would like to reassure the House that it is the intention of the Government to allocate part of the proceeds received from the award of the licence for this purpose when such funding is required. However, a provision in the Bill such as that would not be appropriate. The Bill is concerned with the ongoing operation of the national lottery and how it is regulated.

The aim in regard to the award of the next licence is to ensure that the State receives a large upfront payment while also ensuring a satisfactory ongoing stream of revenues for good causes. The amount raised for good causes currently is referred to as the surplus which is the amount left over after prizes, operating costs, retailer commission and capital investment have been deducted from sales. Consequently, the good causes contribution both in cash terms and as a percentage of sales varies from year to year. In 2011, for example, it amounted to €232 million.

Many of the Deputies noted the importance and scale of this funding, highlighting the local community projects that continue to benefit from this revenue stream, such as Deputy O'Mahony's example of the project that assists sufferers of cystic fibrosis in Mayo or the meals on wheels service in Castleblaney, to which Deputy Heather Humphreys referred. This type of support is needed now more than ever. The Minister assures the House that a strong and robust revenue stream for good causes will be a major component of the terms of the next licence. The precise arrangement on good cause contributions will, as it is at present, be a matter for the licence and not the legislation. In the context of ongoing work on the draft licence, and the competition for that licence, the Department and its advisers are looking at configurations that can deliver the best deal for the State. The Minister can assure the House that central to these considerations are how we can generate a strong annual revenue stream for good causes knowing the numerous community groups and worthwhile projects that are dependent on it.

In the course of a Seanad debate on the national lottery in May 2012, the Minister undertook to include a provision in the Bill to safeguard retailers' rates of commission. However, he has now decided that the guarantee of retailers' commission of 6% on sales of products other than lotto 5-4-3-2-1, which is 5%, will be included in the next licence. This is consistent with the existing position - the commission payable to retailers is specified in the current licence and not in the 1986 Act. There is no backing down from his commitment; he ismerely being consistent with current practice by placing it in the licence. Deputy Fleming rightly pointed out that margins are tightening throughout the retail trade so protecting margins for the period of the licence is very significant, but the Minister is more than happy to do that as the retailer network is at the heart of the national lottery.

Deputy Fleming asked what is included under the heading of "interactive channels". This heading includes Internet enabled devices such as computers, tablets and mobile telephones which allow access to the Internet. The Minister wishes to reassure Deputies that the rules governing online games will ensure to the greatest extent possible that persons under 18 years of age will be prevented from playing such games.

Many Deputies, while welcoming the Bill, expressed a slight note of caution in respect of the potential for problem gambling. It is imperative that a national lottery is fully aware of the risk of problem gambling and that its approach to the suite of products which it offers should reflects this. The Minister will ensure that both the licence under which the next licence holder will operate and the office of the regulator that will enforce the licence will have as a priority an exemplary approach to this issue. The Minister is particularly heartened to note that the lottery industry globally takes this matter very seriously and a number of proactive procedures are in place to address this problem and are being enhanced by reference to latest research in this area. A national lottery is in place to benefit the community and not in any way to harm it. The Minister wants to see people continuing to play the lottery where they can afford to do so. A large proportion of the population playing a little is the preferred model and one on which the Minister intends to base the licence. It will be a condition of the licence to comply with strict codes and procedures regarding the area of problem gambling. The Minister will seek to include in the licence particular practices in place for the online environment. It is worth noting that online play does allow for a greater level of monitoring and a capacity to intervene to prevent problem patterns of play developing.

Some Deputies, including Deputy McLellan, have questioned the need for the establishment of an independent national lottery regulator. It is a reasonable question and I am happy to set out on behalf of the Minister why in this instance it was deemed the right approach. For the purposes of the competition for the next lottery licence, it is felt that a better outcome for the State can be arrived at if the office of the regulator is an independent body outside of Government. Second, it is proposed that this regulatory office will be fully funded by the operator so there will be no cost to the Exchequer. Third, it is the intention to explore the scope for this regulatory body to be linked with new proposals coming from the Department of Justice and Equality concerning the regulation of gambling.

The Minister wishes to point out that in the context of an operator who is willing to provide an upfront payment to the State in return for a 20 year licence, it is vital that there is an independent regulator who will ensure that the lottery is operated in accordance with the Act and with the licence. We believe that the regulatory office can be a modest set-up with a relatively small number of people involved so the cost involved, even though funded by the operator, would not be excessive.

The Minister wishes to point out that we are required under European law to hold a competition for the award of the next licence to operate the national lottery. Even if no provision were being made for an upfront payment, a competition would need to take place for the next licence.

Some Deputies made reference to the current licence-holder, An Post National Lottery Company. The Minister agrees that it has done an excellent job. However, the option of simply retaining the current licence-holder, as implied by Deputies Boyd-Barrett and Higgins, without a competitive process would be a completely backward step.

Some reservations were expressed in the debate about the terms of the competition particularly regarding the involvement of an upfront payment but the majority understand the Government's position. This House will know there are no easy ways to raise funds to provide the level of public services that are required. In the current fiscal environment it would be remiss of the Government not to take advantage of the expiry of the current lottery licence in order to yield the best return for the State and its people.

The Government is using the opportunity presented by the competition for a new licence to generate an upfront payment, part of which will be used to finance the new national children's hospital. In addition, we want a licence arrangement that sees good causes growing strongly knowing the real benefits on the ground that this delivers. Other ideas or concepts around how we can generate the revenues for the hospital through specific lottery draws or earmarking some of the annual contributions will ultimately reduce funds for the projects and community groups that need them.

It has been acknowledged in this debate that we are being innovative in how we approached this licence and we have to be. I wish to clarify that what we will be tendering is a licence for a fixed period. The licence will return to the State in 20 years and it will be the job of the Government of that time to make a decision on how the subsequent licence shall be framed. I say this because it is different to an asset sale. The State has sought to protect, in this Bill, the future benefit of the national lottery licence and its long-term value will be linked to how well it is operated over that period.

The Minister is confident that the Bill before the House will enable us to secure the future success of the national lottery, obtain a significant upfront payment for the State and strongly increase revenue for good causes. The Minister looks forward to discussing the Bill in more detail on Committee Stage.

Michael Healy-Rae (Kerry South, Independent)
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On a point of order, a Leas-Cheann Comhairle, I am very sorry to interrupt. I apologise because there was a mix-up on timing. Is it possible for the Leas-Cheann Comhairle to rule that myself and Deputy Clare Daly can make our short contributions to the debate, just to be on the record? Is that admissible? Again, I wish to apologise to the Minister of State. I was in my office listening to every word of the debate but I made an error of timing.

Michael Kitt (Galway East, Fianna Fail)
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I am sorry but once the Minister responds, that concludes Second Stage of the Bill. The Bill will now move on to Committee Stage and perhaps the Deputy will have an opportunity to make a contribution on that stage of the debate. I am sorry but there is no provision under Standing Orders to allow the Deputy to speak now.