Dáil Éireann debate -
Thursday, 4 Jun 1992

Vol. 420 No. 7

Adjournment Debate. - National Lottery Draw.

Mr. Power

On Friday morning last we awoke to the news that the national lottery had closed down lotto machines across the country to block the commercial syndicate's attempt to win a jackpot of up to £2 million. We were told about the large amounts being wagered at retail outlets throughout the country. The national lottery bosses assured us that they had nipped in the bud the attempt by the syndicate to buy up all possible options. The national lottery asked their agents not to deal with the commercial syndicate but to continue to serve their regular customers. Agents who had put through lottery slips for the syndicate were warned by the national lottery to stop. In some cases where the warning was not adhered to their machines were cut off, although they were switched on again when certain commitments had been given.

An attempt was made to paint the syndicate as the bad boys. We were told that the effort of the syndicate was not in the real spirit of the game, and that may be so. I am not here to represent the syndicate — indeed, I have no involvement in it — but the question must be asked why did the syndicate decide to invest so much money in last Saturday's draw. The answer is that a major blunder was made by the national lottery in offering £100 for a match four win. This offer assured the syndicate of a return of two-thirds of their total outlay, assuming that they had all combinations covered. The match five win, which is usually in the region of £500, guaranteed a return of almost £100,000 extra. If we consider the overall picture, it simply highlights the madness of the national lottery in offering £100 for a match four win. In order to cover all numbers the syndicate had to spend £973,896. They were certain to have 6,525 match four combinations and 180 match five combinations, giving them a return of £750,000.

The result of Saturday's draw showed that three successful tickets had been purchased, and indeed the syndicate were among the winners. There is now the unreal situation in that the national lottery are refusing to pay the syndicate unless they get the names and addresses of all members of the syndicate, everybody who considered joining the syndicate and those who put through or assisted in putting through the tickets. I find this attitude nothing short of a disgrace. When the national lottery was set up in 1986 it was advertised as being tax free, with the confidentiality of all winners assured if the winners so desired. The action of the national lottery on this occasion is a breach of that confidentiality. I call on the Minister for Finance to ensure that payment be made to the syndicate immediately. The national lottery director, Mr. Ray Bates, must assure the country that this farcical incident will never be repeated.

I would highlight further the disgraceful actions of the last couple of days in relation to last Saturday night's draw. I was lucky enough to have a match four combination and I have made numerous attempts to collect the £100 in the local shop in Maynooth but have been refused on each occasion. People will admit that since the national lottery has been set up it has been a great money spinner, far exceeding people's expectations. However, despite the fact that the company have a monopoly, they should not allow it to go to their heads. It is about time they decided to run the lottery for the customers and not for themselves. I call on the Minister to examine the matter and to ensure that there is not a repeat of this incident.

Minister for Finance (Mr. B. Ahern)

I understand that there was an attempt by a commercial operation to cover all possible combinations of the national lottery's lotto game. This is clearly not in the true spirit of the lotto game and could have serious implications for the one million regular players who play £2 and £3 a week. I know that once the national lottery became aware of this operation the company took all the necessary action to protect the interests of the 63 per cent of all adults who play their games regularly. The company endeavoured to ensure that their agents did not exclude plays from ordinary players as a result of the efforts of the syndicate. I fully support their efforts to protect the interests of the majority of players.

The question has been raised about the payment of tax on these winnings. This is a matter for the Revenue Commissioners in the first instance who will be assessing whether this group's winnings should enjoy the tax free status normally accorded to lottery winnings or if they could be regarded as investment income. A possible liability for coporation tax has also been mentioned in the media, and since this again is a matter for the Revenue Commissioners to investigate I would not like to comment further on this.

It is probably inevitable that any lottery offering any large prize money, which is necessary to attract sustained public support, will also attract the attentions of syndicate groups. The activities of regular workplace syndicates, for example, are not a problem. Indeed, such groups are a good example of the social and entertainment value of the lottery. The area of concern is commercial syndicates who attempt to cover all possible plays. This has surfaced as a problem in the United States, for example, and various methods of dealing with the problem have been adopted.

I am aware that the company will be reviewing the whole incident, as requested by Deputy Power. They will also consider the experiences elsewhere of dealing with such a problem and I await their findings. I assure the House that any proposals they bring forward will be given the most careful and urgent consideration to ensure that the problem does not arise again.

Deputy Power mentioned the question of the match four winnings, and I will make his views known to the lottery company. There is no doubt that the factors that convinced the syndicate to move — although it has been widely stated that they planned the move for a long time — were the carryover of the winnings from the previous Wednesday and the match four position. I do not necessarily agree with Deputy Power in regard to the figures given by him. It seems that as the investment of the syndicate was about £900,000 and the winnings were £1,275,000, the estimated profit was about £375,000. I assure Deputy Power and the House that the issues raised will be fully examined. It is important to ensure, for people who support the lottery game, the major contributors to the fun element, and for the knock-on value to the Exchequer and many voluntary and community organisations, that the matter will be fully investigated.