CHARITIES, SPORTS, community and other organisations are to get a smaller share than before of National Lottery revenues under a new system for the fund proposed by Government.
Minister for Public Expenditure and Reform Brendan Howlin said yesterday the Government had agreed terms for a new licence to run the National Lottery. It will be awarded early next year to the winner of a bidding process that will begin in October.
Under the new licence, the operator will have to hand over 30.5 per cent of revenues to the “good causes” that benefit from lottery cash.
While this is in line with last year, when €232 million of the lottery’s €761 million revenues was given to good causes, department figures show it will be a lower proportion than at any time in the previous eight years.
In 2010, projects supported by the lottery received €244 million from the €772 million of sales that it generated, representing 32 per cent of the total. In 2008, when €840 million of tickets were sold, good causes received €268 million, or 32 per cent.
The highest recent share-out was in 2003, when the lottery donated €187 million, or 33.4 per cent, of its €559 million sales.
The National Lottery’s website states that “32 cent out of every €1” goes to good causes.
The money is given to charities, sports organisations, the arts and community groups in the Republic. The bulk of the rest of revenues goes on prize money, with monies also allocated to administration costs.
Mr Howlin said he was “locking in a sizeable future revenue stream” as part of any future deal. His statement added the fixed 30.5 per cent share would be a condition of the new licence, which will last for 20 years.
A department spokesman said the proportion of lottery funds given to good causes varied in the past because the prizes it distributed were discretionary.
The successful bidder will have to make an up-front payment to the State, expected to be between €400 million and €600 million. Part of this will go towards paying for the new national children’s hospital.
In return, they are expected to receive about 6 per cent of revenues. An Post,which has operated the National Lottery since it was established in 1986, gets 0.5 per cent of revenues, which equates to €2.8 million in 2010. “This will be a good deal for the State and the taxpayer,” Mr Howlin said.
The move means that An Post is likely to face stiff competition to retain the licence from several international operators which are known to be eyeing the Irish business.
The semi-State is understood to be exploring the possibility of a joint bid with US gaming and technology firm Gtech Corporation which already supplies it with ticket terminals.
Gtech, which is a subsidiary of Italian gaming giant Lottomatica, the world’s largest lottery operator, has previously expressed an interest in acquiring the Irish licence.
A spokesman said the company noted with interest the announcement by Mr Howlin regarding the licence, saying: “We will review the expressions of interest document when it becomes available.”
UK operator Camelot, which already operates in Northern Ireland, is also understood to view the Irish business as a nice fit for its existing operations.
A Camelot spokesman said: “We are currently reviewing it and once the detail is available we will make a decision on next steps.”
Another likely bidder is the Australian gaming company Tatts Group, which recently won the right to operate the New South Wales state lottery, and which has expressed an interest in acquiring the licence under certain conditions.
Lottery sales in Ireland have fallen sharply in the recession, significantly reducing the amount of money diverted to good causes.
Mr Howlin acknowledged yesterday that lotteries in other countries were doing more of their business online, and that the terms of the new Irish licence would “need to provide for this but in a manner that has sufficient safeguards”.
