I thank the Chairman for the opportunity to address the committee.
I am a businessman with an engineering background. I trained as a chartered engineer and I am a Fellow of the Institute of Engineers of Ireland. Before being appointed chief executive of An Post and chairman of An Post National Lottery Company in 2006 I held a number of senior management positions in major multinational companies - 3COM Corporation, Maxtor Corporation and Unitrode Corporation. I was vice president of 3COM Corporation, responsible for the company's manufacturing, distribution and retail businesses across Europe, the Middle East and Africa. My strategy has been to build on the strengths of An Post and its subsidiaries, the largest of which is the National Lottery Company, particularly in the areas of change management, cost efficiency and innovation, in order to maintain and generate the revenue streams and also maximise return for good causes. In the case of the National Lottery Company my approach has been to maintain its integrity and ethos by ensuring an ongoing significant revenue stream.
An Post National Lottery Company is a subsidiary of An Post, 80% of shares are owned by An Post and 20% by the Minister for Public Expenditure and Reform. The National Lottery Company was established in 1986 under the terms of the National Lottery Act 1986 and commenced trading in March 1987. The licence has recently been extended by the Minister up to 30 June 2013 with some key conditions which are similar to those which operated previously. The key licence conditions are as follows: all lottery games require approval by the Minister for Public Expenditure and Reform; operating cost percent and prize percent must be specified, number of agents are controlled; a management fee is paid to An Post; and the Minister owns the assets of the business, including all intellectual property.
The board consists of seven directors appointed by the Minister for Public Expenditure and Reform. Three directors and chair are nominated by An Post and three directors are nominated by the Minister for Public Expenditure and Reform.
Some 2.2 million adults, 63%, are national lottery players. Of those, 1.5 million adults, 42%, play each week. The national lottery has 103 full-time equivalent employees and there are 3,800 retail sales agents. In 2010 it generated €420 million in prize fund, €244 million for good causes, €48 million for agent commission and €60 million for other operating costs. Some 32 cent out of every €1 raised by the national lottery goes towards good causes. Since its inception the national lottery has created 417 millionaires up to the end of 2010 and another 25 in 2011. A total of €3.7 billion has been raised for good causes by the national lottery since its inception, more than €1 billion of which has been raised in the past four years during my tenure of office. Examples of the good causes include Irish Guide Dogs for the Blind, Irish Kidney Association, Wexford Festival Opera, Limerick Youth Service and so on.
In terms of revenue the lotto family products account for 56% of sales. Scratchcards and Internet instant win account for 20%. The lotto continues to be the most popular game for our players. EuroMillions Games continues to attract new players and the new Tuesday draw has made the game even more attractive with jackpots building quicker.
Results for 2010 show that sales amounted to €772 million, prizes amounted to €420 million and agent commission came to €48 million. The total return to the community was €718 million, 93% of sales.
Benchmarking provides some useful comparison in terms of our performance. We looked at how we perform against equivalent international lotteries. In terms ofper capita sales, our flagship lotto game ranks fifth within Europe, ahead of bigger European lotteries such as France and the UK. The lotto is also ranked eighth in the world with per capita sales of €129 in 2010, having ranked 37th in 2005. Compared with Camelot in the UK, National Lottery Company sales per capita are consistently 47% and more ahead.
Maximising funds for good causes is one of the key objectives. In this regard the lottery ranks highly compared to our European counterparts with aper capita contribution of €54 in 2010. The National Lottery Company ranked eighth of 41 European lotteries as measured by 2010 funds to good causes per capita, considerably higher than the EU average of €44 and the European average of €29. As an efficiency measure, one of the key indicators of efficiency is sales per employee. In 2010, we generated sales of €7.5 million per lottery employee. This ranks us first in terms of sales per employee when compared with lotteries in European countries of similar size to Ireland.
The product roadmap indicates the changes we have made in the product structure during my tenure. We have rebranded and expanded the number of games from a platform of about four back in 2006 to eight in 2011. We have also rebranded the lottery. We currently offer, Lotto, EuroMillions, and a range of instant win games online. We are also developing the appropriate safeguards and controls to roll this out further. If our players launch an Iphone app, they can check the results of the games. We see the Internet, mobile phone and e-mobile spaces being key components for future growth. We have built the technology during my tenure to provide Lotto and EuroMillions via online and mobile phone with an appropriate selection of instant games. We are using this to attract a new generation of adult players and also working closely with the Department in developing this channel to be consistent with our responsible gaming policy.
An exciting development on which we are working is the world game, as part of the EuroMillions group. This is a new worldwide lottery game concept, which should launch in 2014, approximately, and will deliver a very exciting prize structure that no single lottery could deliver on its own and will enable us to generate significant incremental revenue for good causes. Our social media strategy will strengthen our interaction with players, using these new media channels and we are going to launch our Facebook page in January 2012. We have ramped up digital signage throughout our agent network. By January 2012, about 1,000 of our top agents will have screens featuring jackpot amount and game information throughout the country.
Since its inception, the national lottery has raised €3.7 billion for good causes. During my tenure, that sum is over €1 billion. I hope I have demonstrated that I have a track record of innovation, driving efficiency and crucially in the successful formulation of strategy.