National Lottery Bill 2012: Second Stage (Resumed)

The Bill provides for the national lottery licence to be sold to secure an upfront payment to help fund other much needed areas in the economy. The current licence operated by An Post expires at the end of June 2013, with the licence competition expected to open in the spring of this year.

I will speak in favour of the legislation and welcome its introduction. Before I refer to it, though, I will discuss the origins of the national lottery. Its establishment was not without political opposition in the 1980s. I acknowledge the role played by a Deputy of many years who was also a Minister of State, Donal Creed. He brought to the then Cabinet a memo on the establishment of a national lottery. He was a Minister of State at the Department of Education with special responsibility for sport.

I acknowledge the good work the national lottery has done in the past. A total of €12 billion has been invested in various areas over a 25-year period. Many areas have benefited, such as Carrigart, Clonmany, Carrickmacross and Castlecoote. Money was distributed to many areas that otherwise would not have got such benefits.

According to the Minister, there is a need to tender for the outsourcing of the licence but it is important to ensure that we enshrine in the legislation that good causes will benefit. Some might argue that the model that was previously in operation was used by politicians to buy votes but the contrary was the case. It was an exercise in local democracy in action where local politicians were in touch with their constituency base and realised that there were small parishes and areas that would not otherwise have funding to build a new sports centre, an extension onto a sports club or to provide a community centre or service. Politicians are the ones who ensured that the €12 billion was spread out as evenly as possible in their constituencies and fought tooth and nail to ensure that would happen.

We should not avoid the rationale behind the positive functioning of the lottery system. One could ask why such a mechanism was required. One could point to the centralising of Exchequer funding and the priority given to larger projects for worthy needs such as hospitals, the provision of bigger roads, sewerage schemes and water schemes. The bulk of funding goes to core areas where population centres are concentrated. There is a constant fight in rural areas for funding that would not otherwise be available to them. It is important in the context of a debate on the lottery to examine the reason rural, isolated areas are always fighting for the crumbs of its share of the pie.

I could always argue the toss in my county which historically and traditionally had less investment than other parts of the country in terms of national distribution. One only has to look at the motorway systems between Dublin and Galway, Dublin and Limerick, Dublin and Belfast and Dublin and Cork. Each of those cities also has a rail service. There is a national psyche in terms of peripheral areas losing out to core areas. I use the example of my county, but when one brings it to a micro-level, in every county, including populated parts of Deputy Terence Flanagan’s constituency, areas are losing out on investment. Unfortunately, that is the world in which we are living. We must continue to ask why. We must examine the current banking system. I wish to allude to a report compiled by Dr. James Deeny a number of years ago when he worked as a locum doctor in the Fanad Peninsula.

I thank the Deputies for their contributions to this debate. The Minister, Deputy Howlin, who unfortunately cannot be in the House, is conscious of the high regard in which the national lottery is held by the public. Many of the issues raised by Deputies reflect their wish to ensure that Ireland will continue to have a national lottery which is based on integrity and propriety and which takes account of its responsibility to operate in accordance with the public interest.

Deputy Fleming has urged the Minister to ring fence the proceeds from the award of the next licence to ensure the money is safeguarded for the building of the proposed national children's hospital. He has also suggested that perhaps the payment for the licence could be received in instalments over a number of years. The Minister, Deputy Howlin, is concerned to ensure that funding for the national children's hospital will be available at the appropriate time. He would like to reassure the House that it is the intention of the Government to allocate part of the proceeds received from the award of the licence for this purpose when such funding is required. However, a provision in the Bill such as that would not be appropriate. The Bill is concerned with the ongoing operation of the national lottery and how it is regulated.

The aim in regard to the award of the next licence is to ensure that the State receives a large upfront payment while also ensuring a satisfactory ongoing stream of revenues for good causes. The amount raised for good causes currently is referred to as the surplus which is the amount left over after prizes, operating costs, retailer commission and capital investment have been deducted from sales. Consequently, the good causes contribution both in cash terms and as a percentage of sales varies from year to year. In 2011, for example, it amounted to €232 million.

Many of the Deputies noted the importance and scale of this funding, highlighting the local community projects that continue to benefit from this revenue stream, such as Deputy O'Mahony's example of the project that assists sufferers of cystic fibrosis in Mayo or the meals on wheels service in Castleblaney, to which Deputy Heather Humphreys referred. This type of support is needed now more than ever. The Minister assures the House that a strong and robust revenue stream for good causes will be a major component of the terms of the next licence. The precise arrangement on good cause contributions will, as it is at present, be a matter for the licence and not the legislation. In the context of ongoing work on the draft licence, and the competition for that licence, the Department and its advisers are looking at configurations that can deliver the best deal for the State. The Minister can assure the House that central to these considerations are how we can generate a strong annual revenue stream for good causes knowing the numerous community groups and worthwhile projects that are dependent on it.

In the course of a Seanad debate on the national lottery in May 2012, the Minister undertook to include a provision in the Bill to safeguard retailers' rates of commission. However, he has now decided that the guarantee of retailers' commission of 6% on sales of products other than lotto 5-4-3-2-1, which is 5%, will be included in the next licence. This is consistent with the existing position - the commission payable to retailers is specified in the current licence and not in the 1986 Act. There is no backing down from his commitment; he is merely being consistent with current practice by placing it in the licence. Deputy Fleming rightly pointed out that margins are tightening throughout the retail trade so protecting margins for the period of the licence is very significant, but the Minister is more than happy to do that as the retailer network is at the heart of the national lottery.

Deputy Fleming asked what is included under the heading of "interactive channels". This heading includes Internet enabled devices such as computers, tablets and mobile telephones which allow access to the Internet. The Minister wishes to reassure Deputies that the rules governing online games will ensure to the greatest extent possible that persons under 18 years of age will be prevented from playing such games.

Many Deputies, while welcoming the Bill, expressed a slight note of caution in respect of the potential for problem gambling. It is imperative that a national lottery is fully aware of the risk of problem gambling and that its approach to the suite of products which it offers should reflects this. The Minister will ensure that both the licence under which the next licence holder will operate and the office of the regulator that will enforce the licence will have as a priority an exemplary approach to this issue. The Minister is particularly heartened to note that the lottery industry globally takes this matter very seriously and a number of proactive procedures are in place to address this problem and are being enhanced by reference to latest research in this area. A national lottery is in place to benefit the community and not in any way to harm it. The Minister wants to see people continuing to play the lottery where they can afford to do so. A large proportion of the population playing a little is the preferred model and one on which the Minister intends to base the licence. It will be a condition of the licence to comply with strict codes and procedures regarding the area of problem gambling. The Minister will seek to include in the licence particular practices in place for the online environment. It is worth noting that online play does allow for a greater level of monitoring and a capacity to intervene to prevent problem patterns of play developing.

Some Deputies, including Deputy McLellan, have questioned the need for the establishment of an independent national lottery regulator. It is a reasonable question and I am happy to set out on behalf of the Minister why in this instance it was deemed the right approach. For the purposes of the competition for the next lottery licence, it is felt that a better outcome for the State can be arrived at if the office of the regulator is an independent body outside of Government. Second, it is proposed that this regulatory office will be fully funded by the operator so there will be no cost to the Exchequer. Third, it is the intention to explore the scope for this regulatory body to be linked with new proposals coming from the Department of Justice and Equality concerning the regulation of gambling.

The Minister wishes to point out that in the context of an operator who is willing to provide an upfront payment to the State in return for a 20 year licence, it is vital that there is an independent regulator who will ensure that the lottery is operated in accordance with the Act and with the licence. We believe that the regulatory office can be a modest set-up with a relatively small number of people involved so the cost involved, even though funded by the operator, would not be excessive.

The Minister wishes to point out that we are required under European law to hold a competition for the award of the next licence to operate the national lottery. Even if no provision were being made for an upfront payment, a competition would need to take place for the next licence.

Some Deputies made reference to the current licence-holder, An Post National Lottery Company. The Minister agrees that it has done an excellent job. However, the option of simply retaining the current licence-holder, as implied by Deputies Boyd-Barrett and Higgins, without a competitive process would be a completely backward step.

Some reservations were expressed in the debate about the terms of the competition particularly regarding the involvement of an upfront payment but the majority understand the Government's position. This House will know there are no easy ways to raise funds to provide the level of public services that are required. In the current fiscal environment it would be remiss of the Government not to take advantage of the expiry of the current lottery licence in order to yield the best return for the State and its people.

The Government is using the opportunity presented by the competition for a new licence to generate an upfront payment, part of which will be used to finance the new national children's hospital. In addition, we want a licence arrangement that sees good causes growing strongly knowing the real benefits on the ground that this delivers. Other ideas or concepts around how we can generate the revenues for the hospital through specific lottery draws or earmarking some of the annual contributions will ultimately reduce funds for the projects and community groups that need them.

On a point of order, a Leas-Cheann Comhairle, I am very sorry to interrupt. I apologise because there was a mix-up on timing. Is it possible for the Leas-Cheann Comhairle to rule that myself and Deputy Clare Daly can make our short contributions to the debate, just to be on the record? Is that admissible? Again, I wish to apologise to the Minister of State. I was in my office listening to every word of the debate but I made an error of timing.

I am sorry but once the Minister responds, that concludes Second Stage of the Bill. The Bill will now move on to Committee Stage and perhaps the Deputy will have an opportunity to make a contribution on that stage of the debate. I am sorry but there is no provision under Standing Orders to allow the Deputy to speak now.