National Lottery Bill 2012: Second Stage

I move: "That the Bill be now read a Second Time."

The National Lottery Bill is intended to replace the National Lottery Act 1986. The Bill has a number of purposes, in particular, the following: to continue to provide a legislative framework for the operation of a national lottery in Ireland; to continue to safeguard the integrity of the national lottery, for example, through the continued safeguarding of cash generated by lottery sales; to provide for a new national lottery regulator who shall be funded by the national lottery operator and independent of the Minister for Public Expenditure and Reform; and to set out certain principles regarding the regulation of the national lottery, for example, the circumstances in which a licence may be amended or revoked.

The national lottery, an crannchur náisiúnta, has been one of Ireland's success stories of the past quarter of a century. The framework for the lottery is set out in the National Lottery Act which was passed by the Houses in 1986. As those of us who were around at the time remember, the national lottery commenced operations in 1987 and has since been operated under a number of licences by An Post National Lottery Company. In accordance with the legislation, 80% of the shares of the national lottery company are held by An Post and the remaining 20% are held by me, as Minister for Public Expenditure and Reform. The present licence held by An Post National Lottery Company is due to expire later this year.

During the past quarter of a century the Irish national lottery has come to be regarded as very innovative and successful. Since 1987, it has raised close to €4 billion for good causes. Throughout this time the national lottery has maintained the support of the general public, which is crucial to the success of any state lottery. It is fair to say concerns have never been raised about the integrity, probity or ethos of our lottery. This achievement is something of which to be proud and should never be taken for granted.

Like so many other businesses in Ireland, the national lottery has been affected by the economic climate of recent years. Both overall lottery sales and the level of funding raised for good causes have declined since 2008. However, this decline has been from an exceptionally strong performance in 2008. Sales in 2011 were only 2% lower than in 2007. The lottery continues to generate a very significant surplus that is used to fund a range of good causes across the State. For example, in 2011 a surplus of just under €232 million was generated by the lottery. Indications are that both national lottery sales and funding for good causes achieved in 2012 will be somewhat less than in 2011.

The decision to establish a national lottery was taken at a time of economic difficulty for Ireland in the 1980s. We are again seeking to address very serious financial and economic challenges. In view of these challenges, the Government decided in November 2011 to explore the opportunities presented by the expiry of the current lottery licence. Following the examination of the various options by my Department, the Government agreed in April 2012 that the following arrangements will apply to the next national lottery licence: there will be a competitive process for the award of the licence which will be for a period of 20 years; the terms of the next licence will include an up-front payment to the State - the intention is that part of this up-front payment will be used to help fund the building of the proposed new national children's hospital; and the next licence will involve the ongoing provision of a significant level of funding for good causes each year, as is the practice.

I do not have discretion regarding whether to hold a competition for the next national lottery licence - I stress this point because some are of the view I can simply award the licence. There must be competitive tendering and, under EU law, the State is obliged to hold a competition for the next licence. However, the State may set the terms of both the competition and the licence, for example, the duration of the licence and the financial arrangements that underpin it. Deputies may recall that a competition for the current licence was held between 1999 and 2001 and attracted interest from three interested parties. Following the withdrawal of the other two parties during the course of the competition, the licence was finally awarded to the incumbent, An Post National Lottery Company.

I do not need to remind Deputies of the difficult economic circumstances in the country. Given the current budgetary position, the Government needs to be innovative and creative where opportunities arise to generate additional resources for the State. Failure to think creatively about how we might find additional resources has a cost and that cost will be reflected in an inability to provide vital elements of social infrastructure for the people. Therefore, the Government has decided to take advantage of the opportunity presented by the expiry of the current licence to provide for new arrangements for the next lottery.

Recent years have seen a number of states and regions across the globe make new arrangements for their lotteries. For example, two Australian states, Queensland and New South Wales, have in recent years successfully put arrangements in place that involved up-front payments to these states, as we now propose. A number of jurisdictions are examining how best their state or regional lotteries can be used to help alleviate fiscal pressures. It would be remiss of Ireland not to take a similar approach in the case of our lottery at this time.

The Government's announcement has created considerable interest and my Department has met a number of potential bidders. At the same time, I am conscious of the complexity of the project and the number of interests and stakeholders involved. I am committed to achieving an outcome that will take into consideration the concerns of all the stakeholders concerned.

The National Lottery Act 1986 enshrined a model which involved the lottery being operated by a State company, of which the Minister was a shareholder. This model has served us well. However, given the need to generate resources for the State in the context of the current budgetary situation, the new Bill envisages an updated model. The holder of the current national lottery licence, An Post, may, of course, bid for the next licence, either on its own or as part of a consortium. The next licence will also attract bids from private sector firms or from consortia of firms. The Bill provides that the Minister will no longer hold shares in the company that operates the national lottery and that he will no longer appoint its directors. However, it does provide for robust regulation of the national lottery by an independent regulator within a statutory regulatory framework - this is the modern way of doing things and what is being followed in other jurisdictions. The regulator shall be responsible, for example, for approving national lottery games, approving the operator's memorandum and articles of association and managing and controlling the national lottery fund. We will set the criteria in these matters.

The competition for the next licence will be undertaken by my Department. Some time ago I approved and published on my Department's website a protocol which sets out the procedures to be followed in contact with potential bidders. It is envisaged that the competition for the next licence will commence during the second quarter of this year. The necessary preparatory work is being carried out by my Department as a priority. My Department is being assisted in the financial and commercial aspects of the process by Davy Corporate Finance. The most important element of the preparatory work for the competition is the introduction of this new legislation to update and replace the National Lottery Act 1986. The National Lottery Bill was published in December 2012 and much of its content simply mirrors the 1986 Act. For example, the Bill does not provide for changes to the categories of good causes which receive funding raised by the national lottery. However, it also contains important new provisions, for example, in the area of regulation.

As well as dealing with the national lottery, the Bill also provides for a number of amendments to the Gaming and Lotteries Act 1956. Section 3 of the Bill provides for the repeal of the 1986 Act. Notwithstanding this, however, section 6(2) provides that the terms of the 1986 Act will continue to apply to the current licence until that licence expires.

I would now like to outline the provisions of the Bill in the light of what I have said about the Government's approach to the future of the national lottery.

Part 1 of the Bill sets out a number of provisions that are preliminary and general in nature. Section 1 is a standard provision and relates to collective citation and commencement of the new legislation by ministerial order. It also deals with the repeal of the 1986 Act by ministerial order. Section 2 sets out definitions of terms contained in the Bill. Section 3 provides for the repeal of the 1986 Act. Section 4 deals with orders made by the Minister under the Act. Section 5 is a standard provision which deals with the expenses of the Minister in the execution of the Act.

Part 2 of the Bill contains just one section, section 6. Subsection 6(1) provides that there shall be a national lottery held on behalf of the Minister in accordance with the provisions of the Act; subsection 6(2) states that notwithstanding the repeal of the 1986 Act, the terms of that Act will continue to apply to the current licence held by An Post National Lottery Company.

One of the main features of the Bill is that it provides for a new national lottery regulator who shall be independent of the Minister. I would stress that the ongoing costs of the new regulator's office will not be borne by the Exchequer but will be covered by an annual levy which shall be paid by the operator of the next national lottery licence. The provisions regarding the regulator are set out in Part 3. Section 7 provides for the establishment of the regulator's office and for the appointment of the regulator by the Minister. Section 8 provides that until a regulator has been appointed or when the position is vacant, the Minister shall perform the functions of the regulator.

The functions of the regulator are set out in Section 9. Section 9 provides that the regulator's functions shall be to ensure that the national lottery is run with all due propriety and that the interests of participants are protected. Section 10 enables the regulator to hold or procure the holding of the national lottery on behalf of the Minister. Section 11 provides that the regulator's term of office shall not exceed seven years and that he or she may be reappointed for one additional term. Sections 12 to 22, inclusive, are general provisions relating to the regulator and his or her staff. They deal with issues such as the performance of the regulator's functions by members of his staff, disclosure of interests, and the regulator's accounts and annual report. Sections 23 and 24 deal with the arrangements for funding the regulator's office. Section 24 provides that the licence shall provide for the payment of an annual levy by the national lottery operator to meet the expenses of the regulator and his or her office, including expenses relating to staff. Section 25 provides for the issuing of a direction by the Minister to the regulator not later than two years before a licence is due to expire setting out the terms and conditions of the next licence, including its duration.

Part 4 deals with a licence to hold the national lottery. Section 26 provides that following a competition, the regulator may grant a licence authorising a person to hold the national lottery on behalf of the Minister. It also sets out a number of provisions regarding the licence. It provides, for example, that the regulator may grant a licence only to a company and that he or she must be satisfied as to the suitability and competence of the persons concerned to operate the national lottery. It also provides that a licence shall contain a code of practice regarding the operation of the national lottery which must be complied with by the operator. Section 27 deals with the circumstances in which a licence may be amended. Section 28 deals with the publication of details of the licence.

Part 5 deals with the national lottery operator. Section 29 contains a number of provisions regarding the company which a licence holder shall form to hold the national lottery and which is referred to in the Bill as "the operator". For example, it provides, where a licence expires or is revoked, that the regulator may issue a direction in writing to the licence holder providing that the company be wound up. Section 30 provides for the winding up by ministerial order of An Post National Lottery Company, which holds the current licence. Of course, An Post is still free to bid for the next licence either on its own or within any consortia it chooses. Section 31 provides that the regulator shall be required to approve the memorandum and articles of association of the operator.

Part 6 sets out the regulator's powers of enforcement. Section 32 provides for the holding of an investigation into the affairs of the operator by an investigator appointed by the regulator. Section 33 provides that the regulator may issue a direction to the operator or apply to the High Court for an order restraining the operator from breaching the Act or the licence or compelling it to co-operate with an investigation. Sections 34 and 35 deal with the imposition on the operator of financial sanctions, either by the High Court on the application of the regulator or by the regulator directly where the operator requests that the matter be dealt with by the regulator. Section 36 sets out the circumstances in which the licence may be revoked by the regulator. For example, the regulator may revoke the licence if he or she considers the licence holder to have damaged materially the national lottery or the State or the reputation of the lottery or that of the State, or if the licence holder is not taking necessary steps to prevent fraud at the national lottery. Section 37 prohibits the transfer or alienation of the licence or its use as a form of security without the prior consent of the regulator. Section 38 provides for the independent scrutiny of the national lottery by a person or persons appointed by the regulator. Section 39 provides for the appointment by the regulator, following the revocation of the licence, of a manager to take over the management of the national lottery operator and to carry on the business of the operator as a going concern.

Part 7 deals with the operation of the national lottery and the use of funds raised by the lottery. Section 40 increases the minimum level of lottery sales which must be returned to players in the form of prizes from 40% to 50%. I have given some consideration to this and the practice is that more than the existing 40% threshold is given in prizes and I want to make that minimum a matter of law. Section 41 deals with the disbursement of funds. This section sets out the good causes which benefit from national lottery funding which are - sport and recreation, national culture and heritage, including the Irish language, the arts, health of the community, youth, welfare and amenities. Other good causes may be added should the Government so decide. The Bill provides that the existing categories of good causes will remain in place. Section 42 deals with the sale of national lottery tickets. This section provides for the continued sale of tickets by authorised retailers. It also provides for the sale of lottery tickets via interactive channels, which is important as more and more business is done in that medium. It is considered appropriate, in view of the potential for developing lottery sales on the Internet, to provide for the sale of tickets through interactive channels. I stress, however, that this will be done in a way that will protect minors and vulnerable adults. Section 43 prohibits certain persons from owning a lottery ticket, for example employees of the national lottery operator. Section 44 deals with the national lottery fund at the Central Bank of Ireland, into which proceeds of the national lottery shall be paid. Section 45 provides for the approval by the regulator of national lottery games, in other words, the games will have to be appropriate and meet the standards set by the regulator. Section 46 sets out provisions relating to the names "national lottery" and "Irish national lottery" and their equivalents in the Irish language.

Part 8 concerns the furnishing of reports and information by the operator. Section 47 provides for the presentation of an annual report and accounts by the operator to the regulator. Section 48 provides that the operator shall provide the regulator with such information as the regulator may require. Section 49 provides for the sharing of certain information by the operator with the Office of the Revenue Commissioners and the Department of Social Protection. This section provides that the national lottery may disclose information only in respect of a named individual where such information is sought by the Revenue Commissioners or the Department of Social Protection. It strikes a balance between safeguarding the confidentiality of winners of lottery prizes and the need to verify whether particular individuals are compliant with the law governing tax or social welfare entitlements.

The final part of the Bill, Part 9, deals with the Gaming and Lotteries Act 1956. Section 50 provides that the Gaming and Lotteries Act does not apply to the national lottery because it will have its own overarching legislative framework, this Act. Section 51 provides that section 22 of the Gaming and Lotteries Act, which deals with advertising of lotteries, does not apply to sections 27 and 28 of that Act.

For the information of Deputies, section 27 of the 1956 Act deals with lotteries which operate under a permit issued by An Garda Síochána. Section 28 of the same Act deals with lotteries which operate under a licence issued by the District Court. Section 52 of the Bill is a technical provision. It provides for the amendment of both sections 27 and 28 in order that increases to the prizes limits set out in these sections shall in future be made by regulations made by the Minister for Justice and Equality under the Gaming and Lotteries Act 1956. Such regulations are made under the National Lottery Act. It is considered more appropriate for such regulations to be made under the 1956 Act. Obviously there are a lot of technicalities and I hope we will have time to go through them in some detail on Committee Stage. I wish to hear the views of Members in that regard.

The national lottery has been one of Ireland's success stories since its establishment 26 years ago. The Government is committed to safeguarding the national lottery and securing the continued provision of funding for good causes. It is also committed to availing of the opportunities provided by the issuing of a new lottery licence, which we must do, to raise a significant up-front payment for the State which will enable the Government to deliver a key health facility, the new national children's hospital. I am acutely aware of the value people place on the national lottery, but after 26 years we need to take stock to ensure what we propose is fit for purpose and in tune with the development of lotteries and practice after more than a quarter of a century. I commend the Bill to the House.

I welcome the opportunity to speak on the National Lottery Bill 2012 as I had looked forward to doing, based on everything this Minister and other Ministers had stated and on what was contained in the programme for Government, namely, that part of the funding from the proceeds of the sale of the lottery licence would go towards funding the national children's hospital. This is what was stated:

The programme for Government pledges to protect health capital investment. This review delivers on that commitment and in particular includes funding for the development of the new National Children's Hospital. Reflecting the importance of this project, a large up-front payment arising from the new National Lottery licence will complement Exchequer funding.

This is a clear reference to linking the sale of the licence to the national children's hospital. On 4 April last year, after more than a year in government, the Minister, Deputy Howlin, stated in the House: "The longer-term licence offered an opportunity to generate funds that will benefit community and provide essential services through providing significant funds towards the construction of the national children's hospital". I commend that and agree with every word the Minister said in that statement. On 4 July he stated: "The new licence will also involve an up-front payment to the State with some of the payment being used to help fund the building of the proposed national children's hospital". I could not agree more with the Minister.

The Minister for Health, Deputy Reilly, who is responsible for the national children's hospital, stated the Government's intention was to seek a large up-front payment to the State as part of the arrangements for the new licence, with some of the payment to be used to help fund the building of the proposed new national children's hospital. Again, I could not agree more. During question time on 21 November the Minister, Deputy Howlin, and I discussed this matter. I asked what would happen the proceeds from this sale that would come through during 2013, given there was a new decision on the location of the hospital site and that it would be some time before most of the expenditure for building the hospital would be required. I asked whether the process would be ring-fenced to ensure the funds were available when building began. I also asked whether the fund would be managed by the NTMA or if it would be used to fund other capital infrastructure projects, with the Minister reimbursing the money in 2018 when it would be required. I did not say whether I was for or against the latter case but if it happened the Minister would essentially be using the proceeds of the sale of the national lottery licence to fund capital investment over the coming years. However, in 2017-18, when the bulk of that money would be required for the building of the children's hospital, the Minister would have to fund such building from current expenditure. The Minister, Deputy Howlin, must clarify this point before the legislation is passed and state whether the link between the sale of the lottery licence and the hospital funding will be broken. I wish to ensure the maintenance of this link.

Although people may have a problem with the selling of the national lottery licence, if it is explained to them that the money obtained is intended for the national children's hospital most will be happy to accept that concept. I challenge those who are opposed to selling State assets to oppose the notion of raising money for the children's hospital. I am happy with it, as I stated in the Chamber on 21 November. In reply that day, the Minister, Deputy Howlin, noted that I was assuming the Government would receive a substantial fund the following year and stated that he was exploring whether to put it into an escrow account intended in particular for the national children's hospital or whether it would be more prudent to act as I had suggested. He observed that it was important to have a robust funding mechanism in place, stating:

I am minded to ringfence the money as Deputy Fleming has indicated I might do. I am minded to do that and have asked the Secretary General of my Department to explore options in this regard.

I completely commend that. It was the object of my question. I asked it again last week but the Minister was not present and we did not go into it in much detail.

I was in Brussels last week.

I understand that and will not say more on last week's discussion.

In his statement today, the Minister reiterated it is the intention that part of the up-front payment will be used to help fund the building of the proposed new children's hospital. Two minutes ago, in his last sentence, the Minister stated he would issue the lottery licence to raise significant up-front payment for the State which will enable the Government to deliver a key health facility, the new national children's hospital.

The Minister can imagine my shock during Christmas week when he published the National Lottery Bill in which, although it has 52 sections and 28 pages, we can find no reference to the national children's hospital or of ring-fencing the proceeds of the sale. The Minister may say these are different issues but there has been a whole debate on the issue and there has been public acceptance of the proposal The Minister mentioned great support for the plan and stated it was held in high esteem. It is in the programme for Government. On several occasions both the Minister, Deputy Howlin - even today - and the Minister for Health, Deputy Reilly, spoke about using the proceeds of the sale of the national lottery licence for building the national children's hospital. However, there is diddlysquat in the 28 pages of legislation about that hospital.

It is our intention.

It is not in the legislation where we wish to have it. My party will be happy to support the legislation if there is a mechanism to ring-fence the proceeds on that basis. The Minister will have to explain this to us. People have issues about selling State assets but I believe most people would accept this sale without quibbling too much if the funding could be ring-fenced.

It is about licensing. We have to tender for a licence.

I know that but the Government could have assuaged the views of the public. I have given several direct quotations from the programme for Government-----

It is our firm intention.

Before the Minister concludes he might state whether he will address this point in some way on Committee Stage. I am not going to tie his hands in regard to how the fund is managed. We could have a debate on the nitty gritty of the funding and whether it is to be locked up in a certain account, or whatever. We will have constructive suggestions on that. We are just not sure about the legislation without such a commitment. That is all I have to say. In regard to public support it would not do the Minister any harm to have this commitment in the legislation. It would strengthen his position in getting the public to accept it.

I refer to the timescale. We realise there may still be planning issues because the site is in a city centre location. There was a report in the newspapers of a squabble between the HSE and St. James's Hospital, although I do not know what it was about. However, I am not surprised. Children come last when it comes to such issues. I believe there is an issue about the board of the national pediatric hospital project committee. I am not sure of its membership but hope the problem can be sorted out in the period ahead.

A suggestion comes to mind. If the Government gets the money up-front and was in a position to hold onto it there is another way of dealing with it. I have been thinking about it in recent days. Instead of getting all the money up-front in 2013, the Government may be able to get a greater amount if the operator chosen were to pay instalments over five years. The money would be received in 2015, 2016 and 2017, as required, but no other Minister could lay hands on it in the meantime to run off and build a hospital in some constituency or other. We will not go there. In that way, the Minister could ensure that the proceeds from the sale of this licence would come in closer to the time when they would be needed.

Some more money might actually be collected because the operator of the national lottery would have the use of, for example, an extra €100 million per annum for a prescribed period and that could be factored into the tendering process. I appreciate the upfront nature of the Minister's approach. That would have been good if we were building the national children's hospital this year or next year. However, circumstances have changed and perhaps there is also a need to alter the timing in respect of the proceeds in order to more closely reflect the nature of those circumstances.

The Minister cannot put a figure on the amount that will accrue from the sale of the licence but there is nothing to prevent me from doing so. If €600 million is obtained, then I would like perhaps half or some other proportion of it to be made available for the building of the national children's hospital when the time comes. We are all aware of the tight economic situation in which we currently find ourselves. Setting aside a proportion of the proceeds for the national children's hospital would be a welcome development. I wish to give full credit to Senator Marie-Louise O'Donnell for a suggestion she has put forward to the effect that the proceeds of the Wednesday night draw could be specifically ring-fenced for this purpose. If such a proposal were to move forward,,and it could be factored into the tendering process, everyone would be aware that the proceeds of the draw in question would go into a separate fund for the national children's hospital. For the next four to five years, for example, a portion of the gross or net proceeds of the Wednesday night draw could be put aside in respect of the project to build the national children's hospital. Senator O'Donnell's suggestion would be another way of attracting funds to match the required investment over a period of a few years.

I consider what is being done here to be the sale of a State asset. I accept that the licence is a piece of paper but it is also a State asset. The Minister has made great play of his achievement in ensuring, during negotiations with the troika, that 50% of the sale of State assets will be used for job creation purposes.

It will be 100% in this instance.

If we ring-fence it for the children's hospital-----

This is not part of the asset sale.

In the past week or so, the State received €1 billion in respect of Bank of Ireland. It obtained approximately €400 million from sale of the 4G licence in December. The sale of the national lottery licence could bring in up to €600 million. I can provide an estimate in this regard and be wrong but the Minister must be more careful. I might be correct, however, because no one can yet say what will be the outcome. It must also be noted that the sale of Irish Life is expected to realise €1.3 billion. All of these transactions involved or will involve the sale of State assets but none of that money can be used for job creation. It will only be the proceeds from the sale of Coillte lands and the part-privatisation of Bord Gáis to form Irish Water that can be used for that purpose. Therefore, only 50% of the proceeds from the sale of some State assets will be used for job creation. The Minister made a commitment which I and the public understood to be-----

In the programme for Government, banking assets are specifically excluded.

The money obtained from the sale of the 4G licence last year went into the general pot relating to reducing the deficit.

I wish to deal with a few broader issues before commenting on the specifics of the legislation. On gambling protocols and online gaming, the Minister stated: "It is considered appropriate, in view of the potential for developing lottery sales on the Internet, to provide for the sale of tickets through interactive channels." Does this mean that there will be a television channel dedicated to bingo and gambling?

It will be a website.

I understand it will be on the Internet but I want to know if it will be available on television. At present, for example, if I press a particular button on my Sky remote, I will be offered €20 free for a first bet if I start gambling on a certain channel. I am not a gambler and I do not know all the details. However, I do know that such channels are available on my Sky package. Will the Bill allow-----

We will discuss that in some detail on Committee Stage.

This issue must be teased out. In the context of controls relating to those under 18 years of age, there are very few people under that age who, despite whatever parental locks are in place, cannot navigate the various functions of a television remote control. In most cases, it is children who tell their parents how to operate such controls.

I am concerned with regard to gambling and, as a result, I visited the office of the national lottery company a year or two ago and met the chief executive. The national lottery company is already offering Internet gambling services with the permission of the Department of Finance. Customers are obliged to open accounts and provide a copy of their passports and proof of age. It will probably be a surprise to some people but Internet national lottery sales have been available for the past number of years. By the time I met the chief executive, the national lottery company had 7,000 online accounts. In fairness, it had great mechanisms in place. For example, there is a limit on the amount a person can obtain, he or she cannot open second or third accounts because of the need to provide his or her PPS number and he or she is limited with regard to the amount he or she can spend each month. The latter means that people cannot lose the run of themselves. I would like the relevant protocols to be put in place in respect of television gambling.

The Minister referred to prize funds, moneys for good causes and margins for retailers. We want all of these to be protected. A lottery is an attractive business for retailers, particularly as it attracts people into their shops. There is a particular example relating to the retail trade which I wish to offer in this regard. A few years ago, retailers used to obtain a margin of a few percent. However, all of the major mobile phone companies have really reduced that margin in the past year or two in order to squeeze more profits out of retailers. We must include in the Bill a mechanism to prevent the operator of the national lottery from - as is the case in the commercial market - squeezing retailers in the future. What is involved in this regard is a commercial transaction and there is no doubt that the operator will go down this route.

I wish to comment now on the specifics of the legislation. A new lottery regulator is to be established under section 7. In other words, we are setting up a new quango. I had thought we were moving away from doing this. The Minister will state that it is necessary, that there is no other way to proceed and that this is how we operate at present. There must be a way to deal with this matter without establishing a new quango.

This regulator will be merged with the gambling regulator the Minister for Justice and Equality proposes to establish. A regulator is required in respect of all the matters to which the Deputy refers, including online gambling, people losing money gambling, etc.

I am happy with that.

I apologise for intervening but this is somewhat similar to Committee Stage.

The debate is very interesting but-----

The Leas-Cheann Comhairle should let it flow.

-----we are on Second Stage.

The good thing about our discussion is that it shows the Minister is listening and is prepared to engage with us. I welcome that positive aspect but I accept that it might not be exact protocol to have a little chat on Second Stage.

I am concerned with the establishment of the proposed regulator. If it is the Minister's intention to proceed in this regard, then a provision should be introduced on Committee Stage whereby the regulator can be stood down and his powers transferred to somebody else. We will require details of the salary that will be paid to the regulator, the costs, overheads, etc., relating to the running of his office, etc. This is a case of here we go again and members of the public will not be happy when they discover that a new quango is being established.

Section 12 relates to the resignation of the regulator or his removal from office if he does something wrong, if he goes insane or whatever.

Develops a gambling habit.

Yes. He might become addicted but I am sure there is a provision in the Bill which will prevent him from buying a lottery ticket. Section 12 states:

(3) In removing the Regulator, the Minister shall give a statement of the reason or reasons for the removal to the Regulator and the statement of reasons shall be laid before each House of the Oireachtas.

I am of the opinion that the approval of the House should be required in this regard. If it came to it, the Government of the day would win the vote but this is a major issue and, therefore, the approval of the House should be required.

Section 15 deals with the prohibition on a former regulator from accepting office, etc., for a period of 12 months. I have a number of issue with this. For a period of 12 months, a former regulator will be prevented from taking up any other paid employment, consultancy or whatever. The Minister and I are both aware that what is proposed here is the equivalent of a golden handcuffs deal. When the regulator leaves the job, he might as well be handcuffed to the kitchen table or his golf bag because he will not be in a position to work. There will be a need, as part of his package, to compensate the person who takes on the job of regulator in respect of the income he will lose in the 12 months following the expiration of his term of office. That cost in this regard will have to be borne by someone and I am concerned about that. After all, the Minister cannot expect a person to have no income for 12 months. That individual will have to be provided with commensurate compensation.

It must be noted, however, that section 15(2)(a) and (b) both list exceptions in respect of the prohibition to which I refer. In that context, the provision contained in section 15(1) will not apply to someone acting as a consultant to a Minister of the Government. I honestly cannot understand why this exception has been included. In addition, a person who has held the office of regulator will not be precluded from "holding office or engagement in any employment in the Civil Service or any statutory regulatory body". The Minister can explain the rationale behind this on Committee Stage but I do not understand why the prohibition, and exceptions to it, have been included.

Section 16 states that the regulator shall not "hold any other office or employment in respect of which emoluments are payable during his or her term of office". Will the Minister clarify the position in this regard? If, for example, the regulator is a member of the governing body of EuroMillions, will there be a conflict between what is contained in the Bill and what is considered standard practice? I am sure the person will be well paid but I object to the principle of establishing a quango to regulate one particular contract.

The Bill refers to the independent regulator but the regulator requires the consent of the Minister at every turn to determine the number of grades and remunerative conditions of staff and the use of open competitions for appointments.

It gives the regulator an opportunity to pay his staff whatever he likes.

The regulator is not independent and I am happy with that. I like democratic control. I have a serious concern regarding section 24. I issued a press release today and I may have referred to this section. Section 24(2) states: "The amount of levy under this section shall be decided by the Regulator." This gives the regulator a blank cheque for his own operation. The levy funds the regulator and he is the sole person deciding how much he will need for his costs. I would be happier for the Minister to set the levy or for the levy to be approved by the Minister. The regulator is being given a carte blanche to charge the operator for the funding of his office. The operator may regard this charge as excessive but I ask to whom can the operator appeal in this case.

The technical details of the Bill can be discussed on Committee Stage. However, I have earmarked a number of sections which I wish to discuss with the Minister.

Section 47 deals with the furnishing by the operator of an annual report and information to the regulator. The regulator will be required to appear before an Oireachtas committee and the regulator's accounts will be audited by the Comptroller and Auditor General. The operator's accounts shall be submitted to the regulator who, "shall cause copies of each of the documents aforesaid and of the directors’ report to the shareholders of the operator for the financial year concerned of the operator to be laid before each House of the Oireachtas". I would like the operator to be required to appear before an Oireachtas committee. It is a bit like the banks. It is all well and good to talk to the Central Bank and the Financial Regulator but the Oireachtas needs to be able to talk to the banks directly who are the regulated bodies. The turnover in this case is €1 billion. The Oireachtas committee may decide to call them in once every year or every five years. An Oireachtas committee should have the right to call in the operator if so required. I ask the Minister to consider this point.

I refer to the protocols for electronic and digital gambling. It would be helpful for a committee to hear from the operator who is bringing forward proposals for new games. The regulator should be subject to freedom of information and this should be included in this Bill. It is the intention of the Minister to include all new bodies in freedom of information regulation.

Section 49 gives me the shivers. It provides for the sharing of certain information by the operator with the Office of the Revenue Commissioners and the Department of Social Protection. This could be the thin end of the wedge in an attempt to tax lottery winnings. I know this is not the Minister's intention but when people see that the Revenue Commissioners have the right to obtain the name of the main prize winner, this will give them the shivers. The Revenue has other ways of finding out without requiring this power-----

The Deputy will know that lotto winnings are tax free.

I understand that. However, the purpose of this legislation is to ensure the person is compliant with the requirements of the Taxes Consolidation Act. If a winner of the lotto owes the Revenue a tax bill of €50,000, the implication in this provision is that the winnings can be accessed by the Revenue-----

Might that not be a good thing?

It would be a good thing. However, the Minister is opening a dangerous door. Before a prize cheque is handed out to the winner, the Revenue may require a winner to produce a tax clearance certificate. It is not the Minister's intention but it is amazing once such provisions are inserted in a Bill how they can be interpreted. The operator may not wish to hand out a cheque before the Revenue Commissioners have been in contact. This could be a possible result. The Revenue is very good at collecting tax. It is well able to collect any tax owing without the help of the operator. I make the same point with regard to the Department of Social Protection. If a person on a means-tested payment wins a lottery prize, the prize is not taxed but by definition he or she will lose the social welfare payment. We all understand that this is the law. I advise the Minister to be careful because some social welfare recipients win only modest prizes. The intentions are good but there is a touch of Big Brother about some of the provisions. Most prize winners have their pictures in the newspapers so the Department of Social Protection and the Revenue Commissioners have other ways of contacting those people without the need to use the offices of the operator. It is current protocol but it may need to be stitched into this Bill to provide for the Department of Social Protection that only specified staff from the Department or the Revenue Commissioners would have access to personal files of people winning lottery prizes.

My key issue is that I do not think it would damage the legislation to include some mechanism to ensure some funding would be directed to the national children's hospital. The whole country would applaud the Minister if he did so. The people would be very pleased if he closed the gap.

This Bill deals with the new functions of the regulator. The Minister has failed to put into the legislation the necessary protections for the funding of good causes and for retailers who have been central to the success of the national lottery. No solid reason has been offered for the need to establish the office of a national lottery regulator. While the legislation does not deal with how the upfront payment is to be spent, the Minister has informed the House that it is to be used for the national children's hospital. We need this hospital; that is not in question. What is in question is this Government's commitment to children. Instead of making the children's hospital a capital expenditure priority, the Labour Party and Fine Gael have chosen to tie it up with the selling-off of the national lottery licence.

There is no official confirmation of what the upfront payment will be. Currently one third of the national lottery's sales provide funds for good causes. In 2011, the national lottery celebrated its 25th birthday, marking €12 billion in sales, with just under €4 billion going to good causes in the same period. This is an astonishing amount of money which has kept the doors open for community projects and sports facilities and has provided supports for the Irish language. Now more than ever, community organisations rely heavily on this funding stream. It is unacceptable for the Government to offer up a 20-year licence worth €12 billion without including a legislative clause to preserve the current 30% level of provision of funding for good causes.

Debate adjourned.