National Lottery Bill 2012

I support the objective in principle of raising capital sums from State assets. If ever we needed to sweat our assets it is now in Ireland’s hour of greatest need, or what we hope is our greatest need. I am conscious that we are coming under a certain amount of pressure from the troika to get on with the sale of State assets to which the previous Government committed. The troika must be conscious that the timing of the disposal of assets generally, not the lottery in particular, but of any asset, is crucial to its outcome and success.

As I understand it, in this case and probably in all cases of asset disposal, the proceeds will go at least indirectly towards paying down debt. We also have approval from the troika to use at least half the funding in job creation measures. It is only through getting people back into jobs that we will have any hope of paying down and keeping down our debt in the long term. As others have stated, some of the proceeds at least will go towards funding the badly-needed new children’s hospital. That in itself will be a major construction project with a significant and welcome employment content. It will be most welcome in an industry that has been devastated by the recession.

While I support in principle the concept of raising funds by way of a long-term licence, I have some concerns about the fact that we are giving a licence at the same time giving the opportunity for the exploitation of the Internet for the first time not just to buy tickets for existing games, but also for new and possibly lucrative new games. The potential has not been explored to date by An Post, perhaps because it is precluded from doing so by the legislative arrangements governing the lottery. Internet potential is being specifically opened up now. The Minister said some time ago that it is being done specifically, understandably, to make the lottery more attractive to potential bidders. My concern is that if we offer a 20-year licence at a time when we have no idea how lucrative the Internet games might be, that if they turn out to be successful beyond our wildest dreams, we will feel aggrieved that we have possibly undersold the present day value of a 20-year flow of substantial income. Perhaps it would be more prudent to opt for a slightly shorter period, for example ten years, to give us an opportunity to gauge the potential of greater Internet usage by the national lottery.

I am fully cognisant of the need for a capital lump sum and of the need to pay down debt, but I am also cognisant of the need for an annual income that would help close the €15 billion deficit that is dragging us down. It is an important judgment call for the Minister to make the choice between the certainty of a substantial upfront payment and the possibility of a substantial new flow of income as a result of more successful games through the use of the Internet and a greater flow of income.
I hope the Minister has access to the best advice and expertise as well as knowledge of the experience elsewhere in determining the minimum acceptable tender in these slightly unknown circumstances. Ideally, in a perfect market, and assuming a sufficient number of tenderers who are familiar with Internet potential, the tendering process itself should throw up the best price, factoring in the potential, if any, of enhanced Internet usage. I hope that will be the case.

I am also conscious that in a sense what is not in the Bill is of more intense interest to Members than what is in the Bill. I find that somewhat frustrating. I understand that many of the issues in which we as politicians are interested relate to the contract between the regulator and the prospective operator and are not matters for the Oireachtas but, nevertheless, they are issues that have been discussed by others. I refer, for example, to the anticipated upfront value that is being sought from the sale, the percentage that will go to prizes and good causes, as well as the agent’s remuneration and the profits for the operator.

These are all matters of intense public interest to Members of this House, members of the general public and to those who will impacted by whatever is the expected largesse.
An issue covered in the Bill is the requirement that a minimum of 50% of revenue would go to prizes and that is fair enough, but there are no figures for other issues such as the amount that would go to good causes or what would go to profits. The import of the Bill is to set up the framework for the national lottery regulator, who will procure the new operator and determine the acceptability of proposed games remuneration and generally supervise the activities of the operator as well as managing the lottery fund.

The Minister mentioned that he has power to determine criteria to be considered in evaluating licences, but I am conscious that it is undoubtedly the case that the more prescriptive the criteria and the greater the attempt to control the ultimate outcome and the breakdown of the distribution of revenue, the less attractive and probably the more expensive it is for any operators and therefore it will affect the bidding. It would not make any sense for us to insist that the current agents be retained. I mention this because there has been some lobbying in this regard. It would be a nonsense to insert such a provision in any contract because the new bidder may not have any agents or it may have a network of agents. We must be careful about the conditions we insert.

The original purpose of the lottery was to support good causes without putting further pressure on the taxation system. I would expect in setting criteria or in evaluating bids that the original purpose of the lottery would be a priority. It is something of which we should not lose sight in the anxiety to get an upfront payment. The main purpose of the lottery must remain the good causes. The continuing success of the lottery depends on that. The lottery began in the very depths of a recession in the 1980s and it was an instant success and has grown over the years. Well done to An Post for making it the success that it is despite the difficult times we have had. During the years it grew its revenue and while the attraction was largely the prizes, its success was in no small way due to the goodwill people had towards the lottery because they felt they were supporting all these good causes. As was mentioned, the clubs, charities and organisations around the country that have benefited and continue to benefit from it are numerous. It is encouraging to note how little impact these difficult times have had on lottery revenue. Its revenue has fallen but not nearly as much as the fall in other items of discretionary spending. I am confident that if the lottery survives this recession it can survive, prosper and grow again with the economy.

I have a number of queries about the legislation’s main import, which is the setting up of the regulator’s office. I may be wrong on this but the usual role of a regulator is to ensure standards and fair competition where there is a limited number of players operating in a sector. We have a single entity and a regulator and the operator will pay for the regulator. That appears to be a very dependent situation; it seems there is one boss and one paymaster and the boss is being paid by the person they are supposed to be regulating. I wonder is that the best way to go about it. I may be nitpicking but this is something new, a departure, and it is as well to get it clarified and to have potential issues ironed out or at least anticipated.

If I had more time I would like to talk about the position of An Post and what would happen in terms of it being a possible bidder in conjunction with another bidder. I assume it would come under this new legislation but I may get another opportunity to speak on that.

A number of Members mentioned fears about gambling. In the original debate on the introduction of the lottery, fears were expressed about the effect it may have had in terms of gambling. The introduction of the Internet element may bring up that spectre again as a problem but the Internet is here to stay and with supervision in that respect, we have to maximise the benefits that are available to us. Also, it is happening in every other country. Taxpayers have never been more pressed and account must be taken of any potential there may be to raise funding for good causes. I fully support the Bill.