National Lottery Bill 2012: Second Stage (Resumed)

Earlier I outlined a number of projects in County Monaghan that were funded from lottery moneys and while the sums of money involved were not massive, they were absolutely crucial to sustaining these important projects which are of enormous benefit to local communities in County Monaghan and, indeed, across the country.

I acknowledge the fact that the Minister has confirmed that the next licence will involve the ongoing provision of a significant level of funding for good causes each year, as reflected in section 41 of the Bill. It is vitally important that safeguards are put in place to ensure that national lottery funding will continue to support local projects in the future.

One aspect of the Bill which is of concern to me is the possible relaxation of the rules governing online sales of national lottery tickets. Obviously, given the nature of the technology-driven era in which we live, there is huge potential to increase sales by making Internet trade more accessible to the public. I note that at present less than 3% of national lottery tickets are purchased online, which is a relatively small amount. The danger of making online purchases more readily available is the potential that vulnerable persons will fall prey to the new system. In an era where online gambling is rife, I would be concerned that our national lottery could be seen to encourage those with an addictive personality. Obviously if people want to buy lottery tickets en masse, they can simply walk into a post office or a shop to do so. The danger with online sales is the possibility of people building up card debt. That is not what our national lottery is about and it is important that we tread carefully because once we open the door to online sales, it could be a very slippery slope. We do not want the ethos of the lottery, which has proved so strong and been key to its success, to be tainted by a revenue generating exercise. The Minister has advised that the sale of tickets online will be done in a way which will protect minors and vulnerable adults. I would like confirmation that strong safeguards will be in place in this regard because, as we all know, the Internet is not easy to police.

I would also ask the Minister to ensure due consideration is given to the existing network of lotto retail outlets and the fact that their lotto sales form an integral and extremely important part of their business. In many cases, it is the add-on business that is generated from their lotto sales that makes them sustainable and ensures their survival, especially in rural towns and villages. It is important, therefore, to take into account the impact the relaxation of the rules governing online purchases will have on these smaller shops, the rural economy generally and on the social interaction of simply buying a lottery ticket. I ask the Minister to examine this issue.

At the outset I said that our present economic circumstances required the Government to think outside the box with regard to the expiry of the current national lottery licence. This is an opportunity to raise much-needed revenue which will help to fund important local and national projects. At the present time of limited resources, additional revenue is obviously welcome. It is vital, however, that the new arrangements are monitored closely by the new national lottery regulator, particularly with regard to online sales. It would be my hope that the successful tender will recognise the ethos which has made the national lottery so strong in the past and will strive to continue in this tradition.

I thank the Ceann Comhairle for the opportunity to speak on this Bill. Given the difficult financial straits in which this country has found itself recently, all avenues must be explored in terms of finding the finance necessary to get the country back on its feet. As part of this, a number of initiatives were identified which could produce revenue, while ensuring that valuable assets were retained in State ownership. The decision to hold a competition for the next national lottery 20-year licence was among the novel funding avenues identified and I must compliment the Minister for Public Expenditure and Reform, Deputy Howlin, on bringing this idea to fruition in a speedy manner.

The new licensing arrangement is timely as new legislation was needed in any event to take account of new regulatory functions. I understand that following the hoped-for passing of this legislation, the licence competition will be launched very quickly with a view to having the new licensee in place next year. However, while we need innovative solutions, given the difficult times we find ourselves in, it is imperative that we do not diminish the ability of future generations to benefit from assets already owned by the State. The sale of the national lottery licence is an option which can have the twin effects of raising money while not selling off assets.

While I have no issue with the selling of the national lottery licence, I do have concerns about the sale of another asset, namely, Coillte. I hope the Minister takes on board concerns regarding the forestry industry, in particular, in considering the sale of that State asset. We must do our best to protect that industry and the jobs within it. It is important that we listen to all of the stakeholders in the debate on the sale of a State asset such as Coillte so that we do not end up regretting it in years to come.

One concern I have regarding the Bill relates to securing the future of the many small retail stores that are the lifeblood of rural communities and which need to retain their margins on scratch cards and other lottery products. At the moment, such small stores receive a margin of 6% on their sales but there is no provision in the Bill to secure that margin for the next 20 years. Instead, the issue is to be addressed in the licence but ensuring that this margin is retained is crucial for the future viability of such small stores.

Another element that must be safeguarded is the funding that goes to good causes. In 2011, sales of national lottery tickets generated €761.4 million in revenue, with over €422 million of that going on prizes and over €231 million going to good causes. That is a very substantial figure which is a tremendous boost to voluntary groups all over the country. I note that the protection of this funding is to be provided for in the licence as opposed to the legislation. Groups such as RGDATA have called for the percentage of the takings to be distributed among good causes to be retained. Reducing the amount of money going to good causes would make buying lottery products less attractive and would eventually result in a decline in sales, which would be counter productive.

The issue of Ireland's love affair with gambling and the trouble that our gambling gene has caused to date, thanks to the reckless gambling indulged in by certain elements of the banking sector, has been widely discussed this week. Addiction is ruining many lives and many families. A family member's addiction to gambling can cause incomprehensible misery. We must ensure the licence offered to any new licensee has strict regulations attached to ward against pushing gambling products in the direction of already vulnerable people. For example, the availability of national lottery games in pubs or other places where people interact with alcohol should be prohibited.

The economic necessity that prompted the sale of this licence is the need for a new state-of-the-art children's hospital for the nation. The children of the nation deserve such a hospital, which should become available to the current generation of children rather than the next generation. That is why it is important that money raised from the sale of this licence is used in the most effective manner to deliver this key piece of national health infrastructure in a timely manner. This new hospital will be of great benefit to the sick children of the nation and their families and it is about time that all of the various paediatric services are brought together in one cohesive setting. Of course, the building of the new hospital will also be of benefit in terms of the jobs that will accrue. A report from the ICTU has suggested that up to 2,500 jobs could be created during the construction phase of the children's hospital.

It is important to remember that this is not about the sale of the national lottery but the sale of the licence to operate the lottery for a defined period of 20 years. It is a good mechanism for freeing up money for the State coffers at a crucial juncture in our history, and by ring-fencing the money for an important national project, we can all look forward to twin benefits from this legislation.

I welcome the opportunity to speak on the National Lottery Bill. Much of it is concerned with the creation of an independent regulator for a new national lottery brand and amending the original legislation regarding the issuing of the next licence. At the outset, I wish to declare that until a few years ago, I was a national lottery agent but, thankfully, I am no longer such.

The Deputy is in a different lottery now.

Indeed and it is a lot more volatile. I welcome the provisions in the legislation to create a regulator for a new national lottery but I have some concerns, nevertheless. The idea of creating yet another regulator is somewhat problematic. We have regulators for communications and energy as well as various other independent regulatory authorities, and I agree that they should be independent. However, if we are going to create a regulator for the national lottery, could we not incorporate the entire gambling industry? Could we not have a regulator for the various gambling companies, particularly in the context of fast-moving technologies that are affecting the lives of many people in this country? There are many aspects of the gambling industry as a whole that are of concern, particularly in times like these when people are finding it very hard to make ends meet.

I welcome the opportunity to speak on the Bill. The national lottery has been an enormous success for the country. Anyone who is involved in community activity can see the benefits €4 billion has brought to the country in the last couple of decades. It is important that the Bill and any further changes to the national lottery should ensure that the benefit we have seen from the national lottery continues for many years.

Many of the fears expressed when the national lottery was first proposed have not come to pass. This is largely due to the good management of the national lottery to date.

An open tender competition will be required for the new operators of the national lottery licence. This is bound by EU directives and regulations. Currently, the provision of postal services is one of the few areas that have been granted a derogation from the normal public procurement process. For example, someone setting up a new post office, with the ability to gain revenue from the national lottery, is subject to a different set of rules than those that apply in virtually every other sector. I believe new EU legislation will apply the same procurement rules to applications for a licence to run a post office. Can the Minister of State assist me in securing some information on the current guidelines for the provision of post office licences and the audit trails that go with them? That would be very helpful.

I would support a more robust system of oversight. We have considerable regulation in this country, and I do not say the national lottery requires more regulation, but giving a broader remit to a regulator who would cover other sectors, such as off-course betting and other forms of gambling, would make sense.

Ireland is at a slight competitive disadvantage in the broad area of betting, particularly online betting, compared with countries such as Cyprus and Malta. Legislation is promised in this area. The betting industry has been successful for our country and as a small open economy we should ensure that other countries do not put legislation in place that would set our businesses at a disadvantage. That is not to say we do not need to take extreme care that, as with other addictive products that can cause great harm, we do not put measures in place to increase the danger of gambling.

I disagree with some of the previous speakers on the following point. In the 21st century, people are entitled to purchase products online. We must respect people's entitlement to be responsible for their own behaviour. While I accept that an unfortunate number of post offices are closing, if mature people who can prove they are adults have the capacity and desire to purchase products on line, including the national lottery, they should be facilitated to do so. Reasonable guidelines and protections should be put in place to prevent abuse and ensure that people are not setting themselves up for significant disadvantages and financial difficulty in the future.

This Bill provides for the privatisation of the national lottery.

I call Deputy Hannigan, who is sharing time with Deputies Seán Kenny, Regina Doherty and Frank Feighan. Is that agreed? Agreed.

The last speaker brought me back 30 years to when the national lottery was introduced and for some people the dogma is still there. The national lottery was a tremendous introduction to the country. It has benefited many different groups and will continue to do so despite some people's castigation as to the philosophy behind it. It is an institution that is very close to the hearts of many people. It is also close to the hearts of those people who play it and those groups that receive money from it. We all know of community groups that have received funding for projects that have brought tremendous benefits to the members of those groups and also to members of the general community. In recent years many groups in Louth and Meath, including the Meath Youth Federation, Foróige and St. Oliver's scout group in Drogheda, have received funding that has allowed them to provide better services for the young people who take part in their services. It has meant that the groups can provide better facilities to young people in communities where they are badly needed. As a result of this connection between the local groups and the local funding, we must be very sensitive about how we proceed with tendering for the new licence.

I wish to focus on two important elements of the national lottery - the retail margins and community funding. The Minister of State will be very aware that small traders are finding it very difficult in a tough environment at the moment. We must do everything we can to make it as easy as possible for them to come out at the other side of the recession. Under the current licence operated by An Post, retailers get approximately €6 from every €100 worth of lottery products sold. No details have been provided on how this will operate under the new tender, but many small retail groups have noted that the retail sales margin has been left out of the Bill and they are concerned about what that might mean for them. At this time of uncertainty we should give them some degree of certainty about their finances over the 20-year lifetime of this new tender. It would not be unfair to have uncertainty for retail outlets, planning their finances and wondering how they will get through the upcoming period. A commitment has been made to keep the margin at 6% and I hope the Government does its best to keep that commitment when the tender is released in coming months.

At the moment 30% of the income raised by the national lottery goes to groups that need funding. The Bill makes no provision for this to continue, which has raised concerns among many groups that the new operator might slash the funding made available to them, resulting in a reduction in the number of facilities that could be provided or a reduction in the number of groups that could be supported. It is very important that this percentage will be covered in the tender documents. Community groups need to be reassured that they will not lose out when we change the terms of this licence. We all know the front-loaded payment will go towards the new children's hospital and everybody in this House welcomes that proposal. However, we also need to ensure that community groups can continue to access funding over the 20 years of the licence. Many people play the lotto because they know the money raised will go to good causes. It is not all about becoming a millionaire or winning the lottery - people know that while they may not recoup their money in prizes, it is going to a good cause. That is why so many people play it and enjoy playing it. Any changes we make to it will stir up passions among people in this House and outside. I wish the Minister the best of luck with the tender process. We all agree it is in the best interests of the country to get the process right.

The National Lottery Act 1986 provides the legislative basis for the national lottery. The current national lottery licence, which is held by An Post National Lottery Company, is due to expire in 2013. The national lottery is not, in my view, being sold. The licence to operate the national lottery is being sold, which will generate revenue for the State. Obviously, there will be a competition for the award of the next licence and the successful bidder for the new licensee will be required to make an advance payment to the State. The objective of the licence competition is to procure a substantial upfront payment for the State in return for granting an exclusive right to operate the national lottery for a 20-year period while the State will continue to retain significant annual revenues for good causes.

As a result, the legislation governing the national lottery needs to be revised. The Bill before the House is in many respects based on the 1986 Act, which is now being repealed, but also includes certain new provisions, including the establishment of a new independent national lottery regulator. The new legislation intends to continue with the provision of a framework for the operation of a national lottery. It is also intended to continue to safeguard the integrity and viability of the national lottery, for example, through the safeguarding of cash generated by lottery sales, the approval of lottery games by the regulator and the provision of step-in powers for the regulator. The Bill provides for the establishment of a new national lottery regulator, who will be independent of the Minister for Public Expenditure and Reform and the Government, which I welcome. It is intended that the new regulator will be funded by an annual levy to be paid by the operator of the national lottery.

The Bill provides that the national lottery will continue to be operated by a distinct company, whose sole purpose will be the holding of the national lottery. The Minister will no longer have an involvement in the company - he will not hold shares in the company or appoint its directors. I support this separation of political power from the national lottery and independence in this regard is essential.

The Bill contains a number of provisions on the regulation of the national lottery, for example, provisions regarding the sale of tickets and the circumstances in which a licence may be amended or revoked. The Bill provides that, in the event of the licence being revoked, the regulator will have step-in powers to take over the management of the national lottery.

The Bill provides for the sale of national lottery tickets via interactive channels as well as through retail outlets. In an international context, lotteries are doing more business through interactive channels. The playing of lottery games on the Internet is seen as the most likely area of growth for lottery sales in the future. This development needs to be observed carefully and steps will need to be taken to try to guard against gambling addictions being formed and also to guard against existing gambling addicts being enabled to continue to feed their habit, which is immensely self-destructive. I recall the misery caused in this city by the scourge of one-armed bandits before councillors on Dublin Corporation rescinded the adoption of the Gaming and Lotteries Act in the Dublin city area in the late 1980s, which was welcomed at the time.

Local shops face significant challenges in the current economic environment and as an essential part of our local communities they should be afforded all protections possible in terms of their revenues. In that light, I would like to see the modest margin paid to retail agents of, I believe, 6%, protected in the new legislation, and I welcome that the Minister has said he will ensure that this is case in the licence itself where deciding the rates of the margin paid to agents are more appropriately contained.

I understand that discussions have begun between management and unions on how arrangements for the new national lottery licence may affect the serving staff of the current operator. The statutory rights of staff need to be taken into account and protected and their past service also needs to be recognised.

With the continually improving sentiment towards Ireland in the financial markets, I hope that a substantial upfront payment can be achieved for the licence. It is important that a good deal is achieved in this regard as the more income the State is able to generate the better for its people.

I refer to the disbursement of national lottery grants for sports and community activities. I believe that greater transparency is needed and the decision-making function should be transferred to local government. The current position perpetuates the perception that party political considerations play a part in deciding who gets national lottery funding.

It is hard to believe that the national lottery was established in 1987. Through the years it has obviously raised substantial amounts of money for the four main sectors of youth, sports and recreational amenities; health and welfare; arts, culture and national heritage; and, in particular, the Irish language. The Bill will repeal 1986 legislation and establish a new national lottery regulator. The new National Lottery Bill will, please God, mean an upfront payment to the Government by the successful tenderer for the 20-year licence. The upfront payment to the State in the longer term could be in the region of €500 million.

Like others, I have fond memories of the introduction of the national lottery in 1986. The Government has decided that award of the new licence will be by way of competition. The successful bidder will in purchasing this licence make a major contribution, by way of an upfront payment, towards construction of the new national children's hospital.

I was one of the first agents of the national lottery when it was introduced in 1986. The increased footfall it brought to my newsagents and other newsagents helped us survive. Many sports and voluntary and charitable organisations have received funding from the national lottery down through the years. I was in Australia prior to 1986 and saw at first hand how popular playing the lottery was there. I suppose I had a bit of an edge because I understood from a business point of view that without the lotto my business would not survive.

I was secretary of Boyle Celtic soccer club at the time the national lottery was established. I understand that the application made by that club to the national lottery for funding was the second on file. On the first day of sales, there was great demand by men and women for tickets. I was concerned about the impact of this on the country, with everybody losing control of their spending. I recall saying that night that if spending was not curbed we would have a serious gambling problem in the country as a result. I am glad people recognised they had as much chance of winning with a €1 ticket as a €20 ticket. In my experience, there has not been much over-spend on the lotto during the past ten or 20 years.

As stated by Deputy Kenny, while the problem of gambling on slot machines has been regulated by the local authorities, online gambling is now creating problems. However, I acknowledge it is important people can purchase the lotto via the Internet, the margin on which will be only 6%. Many of the larger shops such as Tesco and so on are now lottery agents. It is important the new licence holder is aware of the importance to small shops, in terms of survival, of being a lottery agent. Also, small shops are often more accessible than the larger outlets.

It was a joy for my colleague and I when we met the Minister in 1987 to be told that Boyle Celtic club was to receive funding of £20,000. We went home that night and celebrated. Everybody was delighted. The club was built and the pitch has been in use now for the past 28 years. The standard of the pitch is incredible. The cost of the project at that time was £67,000, £20,000 of which was funded by the national lottery and the remainder of which was raised locally. It was money well spent.

An Post has been very professional in its operation of the national lottery. While there has been much pressure on it down through the years at political level in regard to the location of lottery machines, I believe its decisions in this regard were fair. However, I would say that. I wish the Minister every success. I hope we get a windfall for the country. It is hoped the new licence holder will ensure there is no over-gambling by people. We are moving with the times.

I welcome the opportunity to contribute to this important debate. Like others, I have seen the tremendous success national lottery funding has been in this country on a number of fronts. It has provided a level of gambling, gaming and entertainment in a very controlled and regulated way for those who play it. Irish society has a penchant for gaming and gambling whether at the dogs, horses or bingo. Some would suggest, perhaps rightly, that it is State-sponsored gambling and another tax on the poor. When such a system is put in place, one must be exceptionally careful to recognise that within its ambit one has something which, if it goes out of control, can have dramatic and disastrous consequences for those who participate and play.

It has been so successful in Ireland since its inception in 1986 because of how the current licence holder has succeeded in managing the growth of the product and the introduction of new products in a careful way which looks to the potential dangers and ramifications of being overly avaricious in terms of trying to target new players or trying to target the average revenue per user. It has been a tremendous success because the State and An Post have been able to demonstrate to the players and citizens at large where their tax euro goes. Our communities are very well aware of the very positive benefits associated with the spoils of the national lottery.

Others have spoken about projects developed in their constituencies and it is the same in mine, in areas with which I am mightily familiar. I am minded of the support a former Minister with responsibility for health gave to a cystic fibrosis unit attached to the Mid-Western Regional Hospital in Limerick, involving a voluntary organisation developing facilities for cystic fibrosis sufferers. It received approximately €300,000 over two years which allowed it to garner other funds from philanthropic organisations. Now it is working towards a state-of-the-art facility. This has significant benefits which might not have been provided or might not be on the development list now were it not for these funds being available. It will have a meaningful impact on the lives of many young people. It is easy for some who might say this should be provided by the State, but the State can only levy taxes to a certain extent, and it is necessary to allow this discretionary spend and having another stream of revenue which again can be distributed from State coffers.

The national lottery has worked well in terms of the support it has given to sporting organisations locally and nationally and has allowed for very significant investment at grass roots level. We are well aware of the much improved facilities which virtually every club in Ireland has with regard to playing surfaces, changing areas, gyms and facilities not only for those who play but all those who participate by coming to observe.

From the outset the package has been developed well and it has developed in a very controlled way. The national lottery through An Post has advertised that one could be that millionaire, driving that Ferrari or lying on that beach. At times I was concerned about the notion of the dream being very much part of this advertising. I have a problem with this because it pulls the strings of a certain vulnerable cohort in the community but sometimes it was so overstated it was almost laughable and therefore not as infectious as some advertising campaigns might be, such as those by drinks companies in the past or by cigarette companies which had a very specific methodology for hooking new participants for their products.

I am against the Bill because I am concerned that too much responsibility will be handed over to the new licence holder. The State is seeking an upfront payment which will be a significant boost to the State and will allow it to do certain noble things. My concern is that the new operator will try to increase the overall take from the national lottery spend, which can be done in two ways: either through giving less back to good causes or increasing sales which Deputy Regina Doherty indicated could be done through an extension into online gaming. It is my recollection there is no prohibition on online gaming. The former director of the national lottery, Ray Bates, was a former Department of Finance official. I thought he understood lotteries and the importance of where a national lottery could go wrong and the negative impact it could have on society. He crafted and developed the organisation in a way that ensured it did not boil over and become overly avaricious.

I am concerned if the national lottery goes outside State control and we end up with an international player driving to get a return on the investment made upfront. We may see new games, including online games which by themselves require one to spend more in a less controlled environment. I am also conscious that other countries have a game known as keno which involves multiple draws every ten or 15 minutes and is usually located in pubs or clubs. Such games would move the national lottery into hard gambling. We must accept it is gambling, but I would argue it is soft gambling, no more than horses, dogs and bingo. This is where the line would be breached between entertainment and soft gambling and we would end up with an absolute tax on the poor, with games developed and created to target this audience which will spend more than it should because the return seems possible. Recurring draws every ten or 15 minutes are quite addictive. There are people who spend too much on the national lottery but they will spend it today and then must wait until Wednesday or Saturday. This is controllable, but a multiplicity of games which turn over every few minutes has the real potential to move people into an area associated with slot machines and casino-led gaming. We must be exceptionally careful. This is my biggest concern with regard to the legislation.

I note the real success achieved by the national lottery and I ask the Minister of State to take on board the views and concerns I have raised. These views have also been expressed by others associated with addiction to gambling organisations. They are concerned about anything which might tip the balance. The national lottery is well maintained and well structured and it has been very well managed. I appreciate the Minister of State can stand up and say there will be a regulator.

I am conscious we cannot hardwire into the legislation that the licence will be given to An Post and I am not here to make the case for An Post. I accept under various competition directives from Europe it is not possible for the State to issue a licence to a sub-division of the State and this puts the Government in a very difficult position. If it could hand it over to An Post there would be at least a level of control at arms length. I do not advocate this as it would be nonsensical. For this reason I am deeply concerned that outside players are being brought in.

I have some knowledge of the lottery industry as well as having a general interest in the area. I am not casting aspersions on lottery service providers or lotteries in other countries, but there are different cultures which treat this differently. I have seen the low end of lottery participation and I do not see much difference between this sector of the market and slot machines in a casino. I have grave concerns about this. We need to be very careful about whether the legislation will be prescriptive about the extent to which control of the games will be a factor or feature of it, or whether State supervision or acceptance will be required before these games are introduced.

I want to acknowledge the role the lottery has played since its inception in funding various groups and organisations in the State. An awful lot of development at county level would not have taken place had it not been for lottery grants. There was much economic activity around those lottery grants, as well as socio-economic improvements for sports, health projects and others.

In the context of this legislation, I also acknowledge that the new national children's hospital might be partially funded through the national lottery. My subsequent comments are in no way meant to take from the positive work achieved over the years by the lottery in its current format. However, I do have a number of concerns surrounding the Bill's proposals. First, I think the legislation does not contain sufficient detail to govern the offering of this licence in the market. Lessons will have to be taken from the many mistakes that were made in selling off either enterprises or State assets without the best interests of the taxpayer in mind.

One has only to look at the current reports on toll roads, for example, to understand that the State will have to continue funding those very profitable companies simply because they have not reached the numbers. The detail of the contract concerning this licence is very important. In many cases, however, the State does not look at the detail sufficiently and, as a result, the State is short-changed so the taxpayer had to stump up considerable sums to support the transaction that has taken place.

The legislation needs to be more robust and detailed in terms of the transaction involved. There is an opportunity for the Minister to use the appropriate Oireachtas committee to set out the detail of the transaction and the licence, thus giving greater clarity concerning the agents' 6% and their profitability. The uncertainty needs to be removed.

We also need to examine the regulatory framework being put in place. Various regulators have already been put in place and are being paid in the region of €180,000 a year. In some cases, there is a second or third person on exactly the same level of salary. Within the same organisations, a significant number of employees are earning over €100,000 per annum. The body of staff grows over the years because bureaucracy simply encourages the regulator's staff to grow and prosper at the expense of the State.

One would have to question the type of regulation we have seen. In most cases when an application is made for an increase in ESB, gas or Eircom charges, they look at the cost of the regulator's administration. They also look at the other cost items concerning the company. They almost always grant the increase, so one must ask if the structure itself, in terms of its cost in salaries and bureaucracy, actually serves the citizen it is supposed to protect. It does not seem to do so. It actually serves the corporate entity that it is supposed to regulate. That is what I have seen from the three or four regulators who are currently there.

In opposition, the Government said it would remove a lot of quangos, yet it is now doing exactly the opposite. I would like to see the Government sticking to its guns and having a different corporate structure in place to oversee the lottery, with far less cost and far more accountability to the State. In this instance, one could reduce the 6% on agents' tickets. The sum of €6 in €100 is nothing. What will happen to the agency structure when this licence is given out and it becomes a new entity? What about all the other agents? What is the criterion for establishing an agency? What criteria will be used by the new entity to give out agencies across the country? What will their performance expectations be? They are serving local communities and it is important to a local business. The Minister of State needs to reflect on that because at the moment I am hearing numerous complaints about the lottery being taken from individual businesses and thus affecting their viability. This is in spite of the fact that the turnover figures would stand up.

RGDATA - of which I was once a member - and the Convenience Stores and Newsagents' Association have made submissions on the agents' figure as to whether there is a commitment to hold it at 6% or to increase it. There is much more to it than the 6% figure. There are also performance issues and the appointment of agents, particularly new ones.

I also have issues over the new licence. The Bill states that any terms that are considered necessary or expedient will be included, and that there will be a code of practice contained within the licence. What does that mean? Surely as legislators we should know what that means. We should know the background to the licence and the detail concerning the appointment of agents. In addition, we should know what is being committed to in terms of agents' fees and profitability, but we do not. Yet we are expected to pass the legislation without knowing that. We should also know the detail of the regulator's office and what the potential is for staff numbers. What will they be related to and are they being taken from the Civil Service or being recruited externally? What will be their terms and conditions?

What will be the audit arrangement concerning the Comptroller and Auditor General? I note the legislation proposes an arrangement whereby the Comptroller and Auditor General would examine the accounts. What is the extent of that audit, however, and what is the extent of the role of the Committee of Public Accounts? The Bill mentions another committee regarding oversight but not the Committee of Public Accounts. I would like to see that stitched into this legislation.

Another issue is the period of the licence. The proposal is for a period of 20 or 25 years, but are we going down the same road we went with the road tolls? Will we find after five years that we have sold the taxpayer short, and that we could have got much more for the licence? What are the performance criteria relative to this licence that the Minister will insist upon when the new licence holder is the operator? We need to know that. Twenty years is far too long. What if we have a bad operator? We know what that means - it will just go into litigation with all sorts of crossfire between Departments, the Oireachtas and the operator. Unsatisfactory arrangements can lead to protracted legal arguments, so one may be stuck with the operator for 20 years. Surely there should be five-year reviews with an analysis of all this after that period. The legislation needs to be far more detailed on that matter, so that there is no wriggle room for any licence-holder or sharp operator the State may find itself with. I am not saying it will, but it could.

Every single eventuality should be covered in the legislation. The Bill is short on detail and requires much more analysis on whether we really want to create another regulator absorbing so much cost to the State. Where does the citizen fit into this and how can taxpayers' money be protected?

Next, we have Deputies Pat Breen, Tom Hayes and Peter Fitzpatrick who intend to share 20 minutes. Is that agreed? Agreed.

I welcome the opportunity to contribute to this debate because the national lottery is something all Irish people will agree has been very good to Ireland since its introduction a number of years ago. The games have remained popular over the years and have brought a substantial amount of income to a number of projects nationwide. The wealth that has been created has financed many worthwhile projects. In the 25 years since the establishment of the national lottery in 1986, approximately €12 billion has been generated in sales and €4 billion has been donated to good causes. The funding is spent on many worthwhile projects, such as services for people with disabilities, which is extremely important, services for the elderly, sport in particular, music and the overall advancement of Irish culture. Many communities in my own constituency of Clare have benefited from lottery funding. For instance, the Glór Theatre, Ennis, is a perfect example of the contribution the national lottery has made in support of the arts. This premier venue has seen the performance of many musicals and other art forms, but without the funding it would have been difficult to open the doors of this fantastic facility which is located in the centre of Ennis.

Involvement in sporting and leisure activities also is extremely important, particularly for people's physical and mental health. In this context, funding through the sports capital programme has transformed the facilities that various sporting organisations in County Clare have provided over the years. On the reintroduction of the scheme last year by the current Government after a lapse of four years, it elicited huge interest from many clubs and I believe that for every euro available, there was a demand for €7.50. Ultimately, 23 projects out of 70 were funded to the tune of nearly €740,000. It was great to see so many clubs being successful, among them being my own local GAA club of Ballynacally.

In addition, lottery funding is essential for many organisations that provide health related services in our communities. For instance, the Brothers of Charity services operating in Ennis were allocated €100,000 for the remodelling and renovation of existing workshops on the Kilrush Road. Another recipient was The Clare Crusaders Children's Charity, which is a voluntary organisation that provides a great service in Barefield, County Clare, for approximately 190 children with special needs. Similarly, assistance was provided for a minibus for the Friends of Ennistymon Hospital, while Carrigoran House, Newmarket, received funding towards the development of a satellite catering service for its new day care service, which was opened recently. Consequently, this funding is extremely important and has benefited various other projects, including the AstroTurf pitch for the community of Tulla, child care facilities and environmental projects.

This is the reason I welcome the stipulation in the legislation that a fixed percentage of the annual lottery turnover must continue to go to some good causes. The percentage has been set at 30.5%, which is the same level of funds disbursed to good causes in 2011. I believe this to be significant as it demonstrates the Government is committed to ensuring that the voluntary and community sectors, such as those I already have mentioned, will continue to receive support under the new national lottery system. It also is important to point out that by selling this licence, the State is not giving up all the future funding in exchange for a one-time upfront payment. The opposite is the case because it will ensure the status quo and the level of support for good causes is maintained. The lottery is extremely important and one half of the adult population claims to have played it regularly at one point. Many people are not aware of how vital and beneficial it is for the aforementioned organisations that these proceeds go into such centres and organisations in particular, as well as to other spheres of culture in Ireland.

The main benefits to be derived from undertaking an open sale competition to appoint a new operator are twofold. First, by having an open sale competition for a new operator, one ensures the State will get the best possible deal. In this context, it appears that a number of companies, both in Ireland and overseas, are interested in acquiring the national lottery licence. This is what the State needs, namely, the best possible deal to secure the money for projects. The obligation on the successful operator to make an upfront payment will ensure the funding required for the development of the national children's hospital will be secured. The development of the national children's hospital is an extremely important project not just for Dublin, but for the entire country. Everyone present in this Chamber recognises the need for such a hospital and to have a modern facility. All such facilities are extremely expensive and the sale of the licence will help to ease the burden on taxpayers when it comes to funding this project, which is one of the largest projects in the current capital plan. Various reports put the projected revenue to be gained from the sale of a licence to be in the region of €500 million, which is a significant amount of money and which certainly would play an important role in financing the national children's hospital.

As I stated earlier, playing the lottery's games has proved to be very popular. New games are continually being introduced and they have proved to be very popular. However, one aspect of this Bill about which I have concerns for a number of reasons is that unlike the National Lottery Act 1986, it places no restrictions on online playing. At present, the purchasing of cards online amounts to approximately 3% of volume compared with approximately 15% in other European countries. Everyone is aware of the addictions that can develop from online purchasing. This much is evident in respect of online betting, where young people use their apps and mobile telephones to bet. Were online purchases to increase, the same could happen. In addition, it is important for rural Ireland in particular to have the tickets for sale in shops because if one increases the online purchasing of lottery tickets, it certainly will be at the expense of the local shop and all Members are aware of the pressure on such shops and post offices at present. If someone goes in to buy a lottery ticket, they also will buy something in the shop itself. Consequently, I am somewhat concerned about this and would like to see more restrictions on such sales. I certainly do not seek to have greater numbers of people getting hooked on the online purchasing of such tickets in the way people have become hooked on online betting. It has been proved there is room for the market to grow. It has been stated that half the adult population has played a lottery game at some point. It is important to try to grow this market in a manner that does not place significant burdens on people. As previous speakers have noted, one can see the glamour of all the advertisements to the effect that one can win a fortune and be a millionaire for the rest of one's life. However, very few people achieve such a level of winnings. Nevertheless, online purchasing is convenient for people and I worry about that.

Another important element of this legislation is that any new operator will be answerable to a Government regulator. This will allow the Government to continue to have some control over the lottery and to have the ability to take back full control should it perceive any negligent action on the operator's part. Such a safety net is important because it would allow for the continued integrity of the lottery and would ensure the lottery will continue to be run in a beneficial manner for all the people of Ireland. Consequently, the proposed regulator will have a very important role to play. The lottery has become a great source of entertainment and funding for the people of Ireland. This Bill is a necessary step in ensuring we continue to build on its success by capitalising on the opportunities in the growth area in lottery ticketing and ensuring local communities and voluntary sectors continue to receive funding as they have in the past under the watchful eye of the regulator. Moreover, the taxpayer will continue to get good value for money and at the same time, funding will be secured for a number of important projects, particularly the national children's hospital, concerning the site of which there was so much controversy over the years. I welcome the legislation and commend the Minister on bringing it before the House.

I am pleased to have the opportunity to say a few words on this very important Bill, the National Lottery Bill 2012. The national lottery has been a feature of our lives since 1986, when the then Minister of State, Donal Creed, introduced it. There were many questions at the time, particularly from the Opposition, about whether it was a good idea and if it would see more people gambling. The results speak for themselves, and the Irish people are very pleased with them. Listening to the contributions this afternoon, one could say that public representatives, particularly Members of the Dáil, are pleased with what has happened ever since.

The national lottery has funded many good causes right around the country, including those in the sporting, cultural and social spheres. Organisations have received funding which would otherwise have been unable to complete projects. In the youth and sport area, there are monuments in every parish in the country from Donegal to Kerry and from Wexford to Monaghan. It has helped to keep young people, in particular, out of trouble. Sport and recreation is good for our health. We have spoken about people being overweight and obese people needing help. There is much money being spent by the Department of Health in trying to cure people of diseases that could have been prevented if they had kept fit or in a trim manner. The former Minister of State, Donal Creed, had much foresight in introducing the legislation to establish the national lottery.

It is important that we try to improve and revitalise the national lottery for the next generation. There are large amounts of money involved, so it is vital that we ensure the highest standards of integrity in operating the national lottery. This Bill provides for competition to acquire the exclusive rights to operate the national lottery for a 20 year period. It is important that the period is that length, as there is no point in putting it to tender for a shorter period. The company which will operate the project will need at least that much time to focus, and it is important that the process can be moulded over that time. This exclusive right is a valuable property and it is entirely appropriate that it should be awarded on foot of a well-run competition. It is important that the people involved can put their best foot forward, and often in the past people did not get the opportunity to tender. This Bill will allow people to run the project efficiently and do a good job.

In the interests of the taxpayers and the population in general, we must get the best price for the awarding of this exclusive right, with the highest possible proportion of money paid upfront. Our country is in dire need of finance, and the Government has decided that this will provide funding for the new national children's hospital. That is to be commended. The decision to get an external party to run the national lottery, with part of the money received to go to the new children's hospital, is a good one.

I have much to say but I must mention the projects in my constituency of Tipperary South, including those in Emly in west Tipperary, Tipperary town, Lattin, Bansha, Golden, Clonmel and Carrick-on-Suir. Across Tipperary South there are projects funded by the national lottery, and I thank everybody involved in them. The current Minister of State, Deputy Ring, has done a great job, and I also thank previous Ministers who gave out funding and helped Deputies around the country in contributing to constituencies. The projects are worthwhile and I hope the process will continue. I ask the Government to cross all the t's and dot the i's. There has been much valuable work and it has made a great contribution to Irish society. I urge the Minister of State to ensure no mistakes are made and when the regulator is put in place, it should be a simple authority. Local shops should be kept involved and no matter who wins the licence, people must be able to purchase a lotto ticket in every local village.

The national lottery was set up by the National Lottery Act 1986 and has been run under licence by An Post since. An Post holds the licence, which was put out to tender in late 2001 under a previous Government; the company won the competition held between 1999 and 2001.

This National Lottery Bill is intended to replace the National Lottery Act 1986 and has a number of purposes. It will provide for a new national lottery regulator, which shall be funded by the national lottery operator and independent of the Minister for Public Expenditure and Reform. It will continue to protect the integrity of the national lottery through the continual safeguarding of cash generated by national lottery sales and set out certain principles regarding the regulation of the national lottery. For example, there are the circumstances in which a licence can be amended or revoked. The Bill will continue to provide a legislative framework for the operation of the national lottery.

To date there has been little amendment to the original legislation governing the national lottery. In 2011, there was a transfer of responsibility from the Minister for Finance to the Minister for Public Expenditure and Reform. Under section 8 of the 1986 Act, the national lottery fund was established and was used to receive the proceeds of the lottery from An Post National Lottery Company and the payback, cost and prize money for the company. There was also a facility to transfer surplus money to the central funds after leaving an appropriate amount for possible liabilities for good causes and investing for the benefit of the fund any money not currently required.

To the end of 2011, the 25 years of the national lottery generated more than €12 billion in funds for good causes. Money for good causes is distributed between Departments through the process of Estimates of expenditure, and the Department decides where the funding goes. Included in the Bill are the categories of good causes, including sport and recreation; national culture and heritage, including Irish languages; art under the Arts Act 2003; and health of the community, as well as youth and welfare amenities. The Government may also determine other categories.

Sections 26 to 28 in Part 4 provides for the licensing of the national lottery, and one licence can exist at any one time. The terms of section 26 are general, and the competition can be conducted in any manner, as long as the Minister's direction is abided by and the eventual winner is considered suitable by the regulator. Under section 28, the details of the licence and the code of practice contained within the licence are to be published by the regulator. This publication is not to include commercially sensitive information.

Currently, the national lottery is run by a subsidiary of An Post, the An Post National Lottery Company. Under section 29, operation of the national lottery will be carried out by a subsidiary company formed by the licence holder. The memorandum and articles of association of the new company must be approved by the regulator. The minimum amount of funding going to prizes will be raised from 40% to 50% and the terms determining who can buy or own a national lottery ticket will remain unchanged. People prohibited from doing so include persons under 18 and staff of the operator; any person in a company that prints lottery tickets; and any person in a company the supplies computers, electronic devices, computer programmes or related products that are used by the operator. National lottery tickets cannot be sold for less than normal or for free.

Since 1986, An Post has held the licence for running the national lottery. The company has been successful and competent in its management of the lotto and has at all times complied with regulations and conditions attached to the licence. The current management fee to An Post of €2.7 million is most reasonable and provides vital income to a semi-State body that is striving to maintain and enhance its services. Many post offices, especially those located in rural areas, are under review. The loss to an An Post of essential revenue from the national lottery management fee will have a domino effect on the viability of all postal services. In recent years, the first target of An Post management in any restructuring arrangement has been rural post offices. The closure of rural post offices is compounding the already dire circumstances in many areas which have experienced or are about to experience the closure of Garda stations and where pubs and shops are under threat, creameries have been centralised and small local schools are under pressure. Moreover, in many parishes GAA teams have been forced to amalgamate with neighbouring parishes to field under age and, in some cases, senior teams. This is a regular occurrence in rural areas, especially in County Kerry, and these factors are leading many communities to lose their identity and sense of community.

The proposal before us is akin to selling the family silver. Since its inauguration in 1986, the national lottery has been one of the most successful initiatives in generating much-needed funds that have transformed and revitalised organisations and voluntary groups throughout the country. It has provided facilities and services in sport, health, culture, etc., which provide immeasurable benefits to citizens.

It appears there is widespread worldwide interest in securing the national lottery licence, with international companies from Australia, Canada, Britain, Italy and elsewhere on the Continent willing to bid for it. It is imperative that An Post is given every opportunity and afforded a level playing pitch to allow it to compete actively for the new licence in any auction or bidding exercise. The national lottery and its staff have provided an excellent and efficient service since the 1980s and there is no guarantee a new operator would live up to the standards it has set.

Ireland's record in privatising State companies is dismal and we have clearly failed to learn the lessons of the Eircom disaster. The failed privatisation of Telecom Éireann, a company that was building an international quality standard in communications infrastructure and networks, is the main reason we have not provided an adequate standard of broadband in many areas. This failure is a major deficiency in our efforts to revitalise the ailing economy. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, expressed a similar view when speaking of the privatisation of Telecom Éireann.

The proposal to raise the minimum amount of funds allocated to prizes from 40% to 50% is unnecessary as the existing prize money offers an adequate incentive for members of the public to participate in the national lottery. An additional 10% of national lottery revenue should instead be added to the fund for good causes. Since 2001, more than €2.5 billion has been expended under the good causes provision. It is estimated that the new national children's hospital will cost €250 million. The funding required for the children's hospital could be allocated over a three year period under the current national lottery mechanism, thus resolving in a satisfactory manner the priority of providing the new facility while avoiding interference with the current lottery structure.

Increasing the number of outlets operating as lottery sales agents would provide a further boost to sales and enhance the viability of many of the small businesses that made unsuccessful applications to become lottery agents. The Internet accounts for only 3% of national lottery sales. While I accept the view expressed by previous speakers that promoting online lottery sales has a downside, we should nevertheless target the international market for online sales. The United Kingdom is on our doorstep and offers the potential to achieve a dramatic increase in sales. Many people with Irish connections reside in Britain and it constitutes a very large market. Marketing the national lottery internationally could increase the proportion of online lottery sales from the current level of 3% to between 15% and 20%. The additional revenue generated by these two initiatives could be ring-fenced for a three year period and used to fund the national children's hospital project.

The proposition set out in the Bill will be a mistake in the long term for a variety of reasons, not least because An Post's national lottery company will be wound up if it is unsuccessful in bidding for the national lottery licence. Such a scenario would be shameful. Those employed in the national lottery have given great service for 20 years and now face grave uncertainty. This, too, is a major factor which must be taken into account.