Michael McGrath (Cork South Central, Fianna Fail)
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142. To ask the Minister for Public Expenditure and Reform if he is satisfied with the level of oversight relating to the operation of the national lottery licence here; if issues such as breaches of the operating licence or regulatory breaches have been brought to his attention since coming into office; if so, if the full details of same will be provided; and if he will make a statement on the matter. [53624/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I have noted with concern the issues reported by the National Lottery Operator in respect of the operation of 3 games, where some of the prizes on offer could not be won by players of the Lottery. As the Deputy will be aware, the Office of the National Lottery Regulator was established under legislation, with a range of functions, including to monitor and enforce compliance by the Operator with the Act and terms and conditions of the Licence. The Regulator has been carrying out these functions, and reporting to me and to the Oireachtas, through an Annual Report, on a regular basis since the Office was established. The Regulator has already identified and acted on breaches of the licence, and details are set out below. In relation to this most recent issue,  I understand the Regulator is conducting further inquiries into this matter and I look forward to the report on the issues. 

As the Deputy will be aware, the National Lottery is an important State asset which has raised over €5.5 billion in funding for use by Good Causes, and which supports thousands of jobs across the Irish economy, since it was established in 1987. The National Lottery Act 2013 ("the Act") created the Office of the National Lottery Regulator to regulate the operation of the National Lottery through the following functions:

1. To procure the holding of the National Lottery.

2. To monitor and enforce compliance by the Operator with the act and terms and conditions of the Licence.

3. To consider for approval certain matters relating to the National Lottery (including schemes for National Lottery games.)

4. To exercise the enforcement rights of any trademark of the National Lottery

5. To manage and control the National Lottery Fund. 

The Operator of the National Lottery, Premier Lotteries Ireland (PLI) is responsible for ensuring that it operates the National Lottery in compliance with the Act and the terms of the Licence. The Regulator must exercise these functions with the objectives of ensuring the probity and long-term sustainability of the National Lottery, that the interests of participants are protected, and, subject to those objectives being met, maximise returns for good causes. 

The 118 page Licence to operate the National Lottery covers a very wide range of aspects which relate to the operation and regulation of the National Lottery including: payments to the National Lottery Fund, testing of draw equipment, use of trademarks, and the Operator's obligations at the end of the Licence period. There are also four Codes of Practice in place, including a Sales Code of Practice, a Participants' Code of Practice, an Advertising and Promotion Code of Practice and a Vetting Procedures Code of Practice.

The Regulator is empowered under the Act to obtain any information she requires from the Operator, and to appoint investigators where appropriate. The Licence provides that the Regulator may withhold an amount from the payments due to the Operator if the Operator has failed, or fails, to comply with any provision of the Licence.

With regard to the operation of games, section 45 of the Act requires that, prior to its launch, the Operator must submit a scheme setting out the rules of the game to the Regulator for consideration and approval. The Regulator determines whether the scheme for a new game is compliant with the Act and the Licence. Where a game is approved, the Operator is responsible for ensuring that it operates the game in compliance with the approved scheme. If the Operator wishes to amend the scheme of an approved game, it must submit such amendments to the Regulator for approval prior to implementing any changes.

The Office of the Regulator of the National Lottery monitors compliance by reviewing and querying various reports and activities, spot checks of compliance, and proactive themed reviews. Full details of these activities are available in the Regulator’s annual reports on the Regulator’s website. Breaches may be detected through one of these activities or through disclosure by the operator.

Any breaches of the Licence or the Act are reported to the Minister, and subsequently the Oireachtas, in the Regulator’s Annual Report to the Minister in relation to the performance of his or her functions in the previous financial year pursuant to Section 22(3) of the Act.

This significant level of oversight reflects the importance of the National Lottery to the State. Since the establishment of the Office of the Regulator of the National Lottery, four breaches of the Licence have been reported to the Minister and no breaches of the Act have been found. Three breaches were detected by the Office of the Regulator and one was disclosed by the Operator.

In 2016, an analysis by the Regulator of online play data led to a formal investigation. Following this investigation, in 2017 the Operator was found to have breached the terms of the Licence regarding players who have elected to self-exclude themselves from online play.

Separately, regular monitoring of the Operator’s marketing communications in 2017 also led to a finding of a breach regarding the Advertising and Promotion Code of Practice. On foot of these findings, the Regulator issued directions to the Operator, and the Operator improved its controls on self-excluded accounts and withdrew the non-compliant advertisement.

During 2018, the Regulator determined that there were two instances where the Operator breached the Advertising and Promotion Code of Practice. One was a marketing email issued in error to non-subscribers; the other was a media release that breached the standards. The Operator improved its controls on issuing marketing emails and, in response to an instruction from the Regulator, withdrew the non-compliant media release.

Full details of these breaches are available in the Regulator’s annual reports for 2017 and 2018 on the Regulator’s website and these are outlined in a document attached to this response for ease of reference.

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