Issues Related to the National Lottery: Discussion

We resume in public session. We are joined by Mr. Andrew Algeo, chief executive officer, Premier Lotteries Ireland; and Ms Carol Boate and Mr. Derek Donoghue of the Office of the Regulator of the National Lottery.

Before we begin, I ask members and witnesses to be advised of the note on privilege, whereby full privilege is extended to members and those who are conducting the meeting from the precincts of Leinster House. Those on the call from outside Leinster House may have only limited privilege.

I now invite Mr. Algeo to make his opening statement.

Mr. Andrew Algeo

Premier Lotteries Ireland, PLI, welcomes the opportunity to address the joint committee to respond to matters relating to the national lottery. PLI has operated the national lottery under licence and regulation since November 2014. PLI is owned by Ontario Teachers' Pension Plan, OTPP, An Post Pension Funds and An Post, who together, have considerable experience in operating state lotteries.

The national lottery commenced operations in 1987 and has the purpose of raising funds for good causes by providing lottery entertainment in Ireland. On any week, more than one third of Irish adults participate in the national lottery. Participants have contributed more than €6 billion to the funding of good causes in Ireland since the national lottery commenced. Under this licence, 57% of national lottery ticket sales went to players as prizes, 28% went to good causes funding, 6% went to local retail agents in commission on their sales and 9% went to PLI to run the national lottery and generate a return on investment.

PLI has invested more than €71 million, predominantly in technology infrastructure, and doubled its workforce. It has renewed the national lottery games and, in 2015, it responded to customer feedback for higher jackpots by launching a new 47-ball lottery game with a jackpot cap. Since 2015, national lottery ticket sales have grown by an average of 6.6% per year, a turnaround from the previous seven-year period during which ticket sales shrank by 20%. Sales of lottery games were also higher in 2020 than in 2015, a stark reversal of the 41% drop experienced in the last full six years of the 45-ball game. By 2020, annual funding for good causes had increased by €66 million from its 2015 level to reach €254 million. Players won €529 million in prizes, creating 33 millionaires in 2020 alone, and lottery agents received almost €50 million in commission.

The recent rollover of the lottery draw has received significant attention in past weeks with two specific concerns raised. The first is whether there is something amiss with the draw process. Lottery draws are operating in accordance with the game rules, with nothing amiss. Lottery jackpot wins are transparent to the players. They are awarded to players whose tickets have the six numbers that match those randomly chosen at our live televised draws. These draws follow prescriptive processes and are observed by KPMG. The numbers drawn are retrospectively tested to check that no anomalies are evident. The supplier of the central lottery IT system also supplies 35 other lotteries and that system is secured by several layers of protection which prevent malicious intrusion. Checks and balances confirm that the game is operating according to the rules.

The second concern expressed was that the lottery game design is unwinnable. The lottery jackpot can be won, as the six-year history of the current game design clearly shows. A ticket has the same chance of winning in each lottery jackpot draw, the lottery plus 1 draw and the lottery plus 2 draw, each of which have 47 balls. Since 2015, there has been, on average, a winner of the lottery jackpot every five weeks, with an average value of €5.8 million; a winner of the lottery plus 1 top prize every six weeks, and a winner of the lottery plus 2 top prize also every six weeks. In the period since this lottery jackpot started to roll on 9 June 2021, there has been, on average, a winner of the lottery plus 1 top prize every four and a half weeks and of the lottery plus 2 top prize every four and a half weeks. The main lottery draw can be won and it frequently is.

It is highly unusual that the current lottery jackpot still has no winner. Given the tickets purchased since early June, the chances are akin to rolling a die 37 times without the number six arising. Then again it was somewhat unusual that we had lottery jackpot winners on three consecutive Saturdays just before this long roll. Variation in jackpot roll lengths occur because each lottery draw is a pure game of chance without memory. Some €46 million has been generated for good causes from Lotto ticket sales in this current jackpot roll. Since the jackpot capped at a record €19 million, 215 winners of prizes below the jackpot have shared in the €18.1 million of prize money which would otherwise have grown the jackpot further. In this way, as the roll has continued, the game design has rewarded participation with large prizes.

It is in the interests of PLI, and those of all stakeholders of the national lottery, including our customers, that winning the jackpot is seen as both aspirational and possible. That requires jackpots to be both large and won frequently enough. This is a balance. We know our customers want this lottery jackpot to be won soon, as do we. We have sought regulatory approval to introduce a "must be won draw" into the lottery game rules, which would ensure that such an improbably long wait for a capped jackpot win cannot occur again. That would also allow us to provide certainty to lottery players as to the latest date on which this record €19 million jackpot will be won.

I thank the committee for its attention. I am happy to answer any questions that members may have.

I thank Mr. Algeo. I invite Deputy Durkan to put his questions.

I thank the witnesses for coming before the committee. Prior to his current appointment, did Mr. Algeo have any experience in dealing with games of chance such as the national lottery? If so, to what extent?

Mr. Andrew Algeo

Prior to taking up this job two and a half years ago, I had never worked in a lottery. However, I had worked in the gambling sector up until 2016.

In what element of the gambling sector did Mr. Algeo work?

Mr. Andrew Algeo

I worked in strategy in international development in Paddy Power plc.

During that period, did Mr. Algeo have opportunity to perfect the game of chance to the benefit of the consumer and-or the operator?

Mr. Andrew Algeo

I did not work in the design of betting games in my previous career.

Were there any issues arising from Mr. Algeo's experience there that he was able to bring to the national lottery here?

Mr. Andrew Algeo

I have broad experience in management and leadership of organisations which I hope has been of some benefit to the national lottery.

I thank Mr. Algeo. I welcome the announcement last evening to the effect that a must-win prize is available through the rollover. How will the must-win operate, given that the previous six months' experience was that it was not possible to win it and it was rolled over on 51 occasions? What has taken place in the meantime that will enable the consumers to be reassured that the must-win will be a win?

Mr. Andrew Algeo

The jackpot has been capable of being won at all times since the game was designed in 2016. It has been running for six years. As chance has had it, the game has been won on many occasions but this particular jackpot has not been won and has been in a roll since June. The broad direction of the proposal which we have made to the regulator is that we would have a draw whereby if nobody wins the jackpot, that is, matches the top six numbers, the moneys would instead be won by winners in the tier below that where there are winners and as a result it would be certain that the jackpot amount is paid to players.

Am I correct in presuming Premier Lotteries Ireland employs PR companies to carry out research or to promote the benefits of the lottery?

Mr. Andrew Algeo

We have internal teams and we also have various service providers who help us with communications and advertising and marketing.

How much has Premier Lotteries Ireland spent on advertising, marketing or PR in the periods from January to June and June to the present day?

Mr. Andrew Algeo

We do not disclose the breakdown of our operating costs because we are operating in a market which competes for household disposable expenditure against many other organisations and for us to disclose that would be commercially sensitive.

Of course, everything can be said to be commercially sensitive after a while. Arising from that, what is the total value of sales of lottery tickets from January to June and from June to December?

Mr. Andrew Algeo

We publish our sales figures on an annual basis and post them in the Companies Registration Office as well as laying them before the Oireachtas but we do not break them down prior to them being audited or on a mid-year basis.

Mr. Algeo has gone silent there. I was not able to hear the end of that.

Mr. Andrew Algeo

I am sorry. I said that we publish in our annual report, which is in the Companies Registration Office and laid before the Oireachtas, but we do not break them down on any basis more granular than annual.

Would it not be good to break them down from the point of view of establishing trends within the organisation with a view to ensuring that no glitches occurred or alerting Premier Lotteries Ireland to any glitch that might occur? Would it not be better to have a situation whereby, on a monthly or six-monthly basis, Premier Lotteries Ireland might be able to provide the information, and could Premier Lotteries Ireland do it?

Mr. Andrew Algeo

We provide that to the regulator. The regulator has access to all information within PLI on a real-time basis. That is the method of disclosure that we have under the terms of the licence.

Is Mr. Algeo satisfied that the terms of the licence allow Premier Lotteries Ireland to withhold the information that I have requested? Is Mr. Algeo satisfied that that is within the terms of reference?

Mr. Andrew Algeo

The terms of the licence stipulate that we publish our annual accounts and put them down in front of the Oireachtas, and that is what we do.

In respect of the present carryover, which is the result of 51 no-wins of the major prize, what effect has that had on sales? Has it accentuated a public awareness and anxiety to buy more Lotto tickets or has it resulted in the opposite?

Mr. Andrew Algeo

The existing Lotto jackpot roll has no effect on how sales are dispersed around the various entities but, in absolute terms, sales have been larger than average since the jackpot has reached high levels.

Are there any built-in safety devices to prevent or discourage addiction to gambling by having a prize that appears to dominate everything else and might encourage people who had a potential addiction to gambling? Is there a possibility such addiction might happen?

Mr. Andrew Algeo

The national lottery is based on small amounts purchased by large numbers of people and there are extensive protections in place for players, both under our licence but also in how PLI operates. Our lottery games, including Lotto, are designed with player safety in mind and they are approved by the regulator before they are launched. There are mandatory spend limits in place for all customers in our digital channels. We close our website and our terminals at night between 11 p.m. and 7 a.m. Our advertising conforms to our own advertising standard code as well, as those of the Advertising Standards Authority for Ireland, ASAI. In addition, we have material monitoring and intervention processes in our online business. We have a "Think 21" campaign in retail. We do not accept credit cards as a payment method on our website and we have a photo-identification, ID, check our digital registration process. There is a material number of protections in place for players of national lottery games.

I will leave space for other members to ask questions. I have two final questions. In relation to the rollover of Lotto Plus 1 and Lotto Plus 2, how many times has the prize in each case been rolled over since their inception?

Mr. Andrew Algeo

Since 2015 when the game became a 47-ball game, the Lotto Plus 1 top prize has been won on average every six weeks and the Lotto Plus 2 top prize has been won on average every six weeks.

How many times were they rolled over? According to my information, in the case of Lotto Plus 2 it was 16 times and of Lotto Plus 1 it was eight times. Would that be correct?

Mr. Andrew Algeo

The games have been in play in that format for over six years and have been won on average every six weeks.

Over that period the number of times it has rolled over would be greater than those numbers. It might be in the order of 50 times.

Mr. Algeo is a little imprecise in the replies to some of the questions. I will ask questions now, Chairman, and you might possibly let me speak again at the end. Mr. Algeo said in his initial statement: "Since 2015, national lottery ticket sales have grown by an average of 6.6% per year, a turnaround from the previous seven-year period during which ticket sales shrank by 20%". Has he any idea why they shrank by 20% in the seven-year period he mentioned? Has it not more to do with the national economic crash, which covers that period exactly, when people did not have as much money to speculate? Was that not the reason the lottery faltered during that period, as opposed to taking credit for the fact that it has grown in the subsequent period of national economic revival?

Mr. Andrew Algeo

The period when it started to grow coincided with the period when PLI commenced material investment in the national lottery. It coincided with the rejuvenation of the games and improvement of the customer experience in general. I believe that those are material contributing factors to the turnaround in the fortunes of the national lottery.

Mr. Algeo does not think the turnaround in the economy had any impact at all.

Mr. Andrew Algeo

I believe that the actions of, and material investment by PLI, have had a material effect on the sales.

I will come back to that again, Chairman, if I get a chance.

Ba mhaith liom buíochas a ghabháil le Mr. Algeo for appearing before the committee. This is something that is of great interest to many people. My first question relates to the probabilities of this happening. It is my understanding that with 47 balls an individual has a one in 10.7 million chance of winning. An average of 1.4 million tickets are sold per game. Therefore, there is a 13% probability of winning and, obviously, an 87% chance of it being rolled over. That is 13% if each of the 1.4 million tickets per game is different.

Regarding the 87% chance of it being rolled over, the probability of that happening 54 times in a row is 0.005%. Obviously, a probability of 0.005% is highly unusual. Mr. Algeo said in his opening statement that it is highly unusual that this lotto jackpot still has no winner and that given the number of tickets purchased since early June the chances are akin to rolling a dice 37 times without the number six arising. My calculations on that is that it is double that on the basis of the 1.4 million tickets sold per game and that the probability would be 0.01%. Could Mr. Algeo clarify if it is that the number of tickets sold per game has reduced? From my calculations that would mean that there would be approximately 847,000 tickets sold per game. Perhaps he will clarify that initially.

Mr. Andrew Algeo

The sentence in the statement reflects the actual number of unique numbered tickets that are entered into each draw and the probability, given that those sales occurred, that the jackpot was not won in each subsequent draw. There is no estimate or average in it. It is simply the multiplication of the probabilities of each draw, looking at the actual sales, being won multiplied by each other and that brings us to that sentence.

Does Mr. Algeo mean that it brings it down because of the unique aspect?

Mr. Andrew Algeo

Yes. If ten players bought tickets, but two of them had picked the same numbers, then the overall probability of the draw being won would be affected. The draw would pay the jackpot between two people if those numbers came up, but it would not be ten possible winning tickets.

Then the unique aspect is basically that 847,000 rather than the 1.4 million per game. That is what Mr. Algeo is saying, in effect, in terms of the unique aspect.

Mr. Andrew Algeo

Yes. I must admit that I did not recognise the numbers in the first piece of analysis the Deputy gave.

Mr. Andrew Algeo

However, I can confirm that the second piece is based on actual sales of unique combinations.

Okay. I wish to go back to the point when the national lottery was privatised by a Fine Gael Government in 2014. Two additional balls were added to the total numbers needed to match and win. This was always going to decrease the number of winners and increase the number of losers, which is really privatisation in a nutshell. However, we are here today because of the concern expressed by some about the extensive run of jackpot rollovers. We have just spoken about the low probability of that happening. In my view, while the extensive run of rollovers might not have been predicted, surely it should have been prevented at the outset in the setting of the national lottery's game rules. Is Mr. Algeo aware of any risk assessment that was done at the time by the Government? I know he is not here to speak for the Government, but I am interested in whether he was aware of whether there was a risk assessment carried out at that time. When the sale was agreed did the Government of the day raise with PLI the issue of unlimited jackpot rollovers and no requirement for unclaimed prizes to go to charitable causes? I am interested because this is now the issue of the day, but it probably should have been looked at in 2014 to ensure it could not happen.

Mr. Andrew Algeo

I am not aware of what analysis was carried out by the Government at that time. I am sorry that I cannot answer that question. I may have missed a second part to the question and I apologise if I have.

The question related to the risk assessment and then what decision was made at the time when PLI took over. Looking at best practice, in Britain a jackpot can only be rolled over five times. I am startled that this was not examined at the point when the national lottery was privatised. The other major biweekly lottery, the EuroMillions, is the same in that the jackpot can only be rolled over five times. Is Mr. Algeo aware if that was discussed at any point at the time of the privatisation or, indeed, what are his views on that?

Mr. Andrew Algeo

The 47-ball game was designed to meet a customer need as expressed in market research. The market research had a number of game designs tested and the strong customer preference was to have larger jackpots. That is what is brought about by having a larger number of balls. The 52% or the portion of money that goes to prizes and the portion of money that goes to good causes and so forth were not affected in that. It is not a matter of less or more money going to prizes, it is just how frequently the prizes are won and how big the prizes are. That is a balance, and the balance, on the basis of market research at the time, was to increase the quantum of the jackpot while reducing the frequency of the jackpots.

Regarding unclaimed prizes, it was reported by the media earlier this year that unclaimed prizes in 2020 amounted to €17 million. I am sure the people who have not claimed their prizes will not be too happy to hear that they missed them. Can Mr. Algeo specify exactly what happens to the money in the unclaimed prizes? In Britain, unclaimed prizes are directed into the relevant national good causes fund after 180 days.

Mr. Andrew Algeo

Under the terms of the licence that was tendered, the unclaimed prizes are used solely for the purpose of promoting the national lottery.

The effect of promoting the national lottery is to generate ticket sales that then go to generating prizes, money for good causes, retailer commission and funds for PLI to cover the operating costs of running the national lottery as well as return on investment. As the Deputy noted, the quantity of unclaimed prizes was €17 million in 2020. That is actually a reduction on the previous year and the year before that. It has been going down. In 2020, it was less than 2% of sales for the first time.

It is quite interesting and probably something on which the committee needs to focus because, obviously, the purpose of the lottery is to generate money for good causes. The impact on those causes must be central to the focus of the committee. It is a pity that was not considered when the national lottery was privatised by the then Government.

I remind the Deputy of the limited time she has remaining.

I wish to ask a final question relating to probability. My apologies for returning to this issue. Mr. Algeo stated that the probability of having 54 rollovers is the same as that of a die being cast 37 times without a six being rolled, which is 0.01%. We have agreed on that. For the same probability to apply to the run of rollovers means that fewer than 1 million unique tickets would need to be sold per game. Obviously, that is lower as a percentage of chances of winning. Does Mr. Algeo agree that is a lower percentage of chance of winning the national lottery compared with the British national lottery?

Mr. Andrew Algeo

I do not have a comparative statistic for the British lottery. I believe it might be 59 balls there. That game has an entirely different structure. I believe it can roll over a fixed number of times and then has a draw that must-----

Mr. Andrew Algeo

Five times. That will bring frequent prizes at lower levels. The numbers I provided are based on sales at the beginning of June and running into July and August as they actually were. That is on what the analysis is based.

I ask Mr. Algeo to furnish the committee at a later stage with more detail in respect of that comparison with the British lottery. I think it is a 1 in 45 million chance, as an individual, to win the British lottery, but in terms of ticket sales, etc., that obviously changes and the probability changes. I would be interested to get those figures. I can send him my specific question after the meeting, if that is okay.

I welcome our guests to this important meeting. I refer to the seeking of regulatory approval to introduce a must-be-won draw. Mr. Algeo referred in his opening remarks to knowing his customers. Let us be frank: if it were not for the campaign by Deputy Durkan, Mr. Algeo would not be doing this.

Mr. Andrew Algeo

The interest of, and comments by, Deputy Durkan are certainly welcome. We have been working with our suppliers and, indeed, we notified the regulator in early November of our intention to introduce a device such as this. As the national lottery has so many checks and balances, parallel systems and layers of governance over every draw, it is not a trivial thing to change games rules. The process of introducing a contingency to a very long draw, or this very long draw, has been in place for some months.

It is interesting that we only heard about it the night before Mr. Algeo was due to appear before the committee. Not for the first time in my political career, I think we all owe a debt of gratitude to Deputy Durkan, regardless of our political shade. On that note, how much money has been spent on advertising since November? How does that compare with the previous two years?

Mr. Andrew Algeo

We do not break out our operating expenses-----

Mr. Andrew Algeo

-----because they are commercially sensitive.

Surely advertising spend is beyond commercially sensitive. If there is a rollover draw that is not being won and a campaign of understandable public concern that it is not being won, and there has clearly been a significant increase in the level of advertising, Mr. Algeo should be able to furnish those details to an Oireachtas committee. If he is not prepared to do so at this stage or does not have them to hand, perhaps he can provide them by way of further correspondence.

Mr. Andrew Algeo

I am sorry, but we do not break out our advertising spend as it is commercially sensitive.

Okay. Mr. Algeo would have to admit there has been a significant volume of advertising, regardless of the amount that has been spent, since November.

Mr. Andrew Algeo

The amount of advertising has varied, as it does, from week to week and month to month.

It varies, but it is clear to me that this draw was not being won, focus was rightly brought to it by a Member of the Oireachtas and the amount of advertising increased. I wish to return to an element of the replies Mr. Algeo provided to Deputy Durkan. He stated there has not been an actual decline in sales but there has been a short-term decline in sales. I ask him to provide a little more depth in terms of the reasoning, from his commercial point of view, for that.

Mr. Andrew Algeo

I am sorry, but I do not remember suggesting there a short-term decline in sales. Is the Deputy referring to prior to PLI operating the national lottery?

Yes, but I am more interested in the short-term decline.

Mr. Andrew Algeo

I am sorry; the Deputy asking about a short-term decline. In which period?

As Mr. Algeo stated, compared with PLI, but also just in terms of sales for the past six months and how they have compared.

Mr. Andrew Algeo

Sales of the lotto product have been higher than normal in the past four months, let us say. I do not think I can say any more than that.

It is a little concerning because, obviously, there is public money involved and this has become a significant focus of attention and now we are having one of these must-be-won draws. Does Mr. Algeo envisage this being required again in future? Is it his intention to let it go for 50 rollovers or 51 rollovers or, as Deputy Farrell suggested, to perhaps look at European or UK models?

Mr. Andrew Algeo

I would prefer not to go into the exact lengths of time simply because this is a matter for consideration by the regulator at this point. The idea in general is to provide certainty to the public in respect of the number of times the jackpot will roll over once it reaches a cap.

Ba mhaith liom buíochas a ghabháil le Mr. Algeo as ucht teacht isteach. The purpose of the national lottery is to raise money for worthy causes and to have a regular prize draw for the public. That is not happening at the moment, so it is clear the system is broken. It is clear that what we have today is not what was designed in the first place. It has not happened by accident. The addition of 11 balls has obviously changed the game. The addition of extra balls since 1988, and including some since Mr. Algeo's company took over in 2014, has made it more difficult to win and, therefore, more likely that jackpots are not won regularly.

What was the turnover of PLI in the first six months and how does that contrast with the second half of the year?

Mr. Andrew Algeo

I am afraid that we do not break out any sales figures before they are audited. We report on an annual basis as stipulated in our licence. The game itself has been in situ for more than six years now and has produced jackpot winners on average every five weeks. Similarly, the lotto plus 1 and lotto plus 2 draws have produced jackpots on a frequent basis.

There is no way that Mr. Algeo's company does not break out the monthly turnout of its sales. I am sure any managing director would be acutely interested in the monthly turnover and profit of the business.

Mr. Andrew Algeo

I am sorry; perhaps I ought to have stated that we do not publish it.

Mr. Algeo stated that these things are sensitive because of competition. With whom is PLI in competition in Ireland?

Mr. Andrew Algeo

Everybody who is competing for household expenditure, including fast-moving consumer goods, FMCG, companies-----

That is a very broad understanding of competition by anybody’s measure. Surely a jackpot worth €19 million is a licensed business because it is singular in its operation and does not have direct competition.

Mr. Andrew Algeo

Buying a lottery ticket is a discretionary decision among many other discretionary decisions consumers can make as to what to do with their disposable income. The national lottery does compete in the marketplace for that entirely discretionary expenditure.

I understand that but, to put it in marketing terms, if you do not analyse your competitors with a sharp focus, you will not be able to compete fully or operate. I do not accept that expenditure on a national lottery jackpot is in competition with pretty much all other discretionary expenditure, and I am sure that most others do not either.

Is it not in the lottery’s interest to have lotto jackpots increase in size? When there is a big jackpot, people are more aware of it, more interested in it and more likely to spend. Therefore, the greater the number of rollovers, the more profitable the company.

Mr. Andrew Algeo

It is a matter of balance. The available income from ticket sales can be used, at one extreme, on very frequent jackpot wins or, at the other end of the spectrum, on very large jackpot wins. It is a matter of finding, through customer preference, where that balance should be struck. The history of the lotto game shows the lotto sales shrank at a far quicker rate than most national lottery ticket sales prior to the game change and since that time have-----

Does Mr. Algeo not admit that, in the past four months, there has been an increase in sales for the jackpot prize of the national lottery and that, as a result, it is fair to understand that an increasingly high jackpot increases turnover and profitability? There is probably a flipside, however, in that if it gets into the public psyche that a draw or jackpot cannot be won, it hurts sales, which might motivate a private company to seek regulatory change in that regard. Is that the reason the regulatory change was sought?

Mr. Andrew Algeo

The reason we applied to the regulator for a change to the rules of the existing game — it was just to change a portion of it — was to return to having a balance between high and frequent jackpots. It is not good to have jackpots that are too frequent and low, nor is it good to have jackpots that are too infrequent and high; it is a matter of getting the balance right.

In hindsight, maybe the addition of the extra balls has caused difficulty.

PLI is a consortium. It includes the An Post pension fund and the Ontario Teachers’ Pension Plan. Accounts have shown that PLI has racked up about €120 million in interest on loans from the consortium since 2014. The payment of the interest is having an effect on reported profitability. It is hard to understand why the lottery would take out loans, with interest of €120 million, from the consortium over the period in question and have to pay back this interest.

Mr. Andrew Algeo

PLI, the operator of the national lottery, has invested very heavily in the national lottery — predominantly in technology — to the tune of €71 million. In addition, PLI paid the winning bid in the tender, amounting to €405 million. Those facts create a need for funding.

The interest repayments are the reason profitability has been reduced.

Mr. Andrew Algeo

The business is profitable and generates cash flow from its operations. It also has costs of finance after that fact, which is to finance-----

The licence is granted by the State. We have to return to the original model of regular jackpots. It is necessary to have time limits within which jackpots must be won.

Mr. Algeo said the money from unclaimed prizes goes back into promoting the lottery. Is that correct?

Mr. Andrew Algeo

That is correct. That is what is stipulated in the licence.

I understand that. What has been unclaimed so far in 2021?

Mr. Andrew Algeo

I do not have that figure. At this point it would be hard to disclose it, but we certainly will be disclosing it in the fullness of time, along with our accounts.

In 2020, the figure was €17 million. What was it in 2019?

Mr. Andrew Algeo

It was €19 million the year before, €16 million the year before, €16 million the year before that, and €20 million in 2015.

Could Mr. Algeo go back over those figures? The figure for 2020 was €17 million. What was it in 2019?

Mr. Andrew Algeo

The figure for 2019 was €19 million.

What was it the previous year, in 2018?

Mr. Andrew Algeo

In the previous year, it was also €19 million. It was €16 million in 2017, €16 million in 2016 and €20 million in 2015.

Those sums of money are ring-fenced for the promotion of the lottery. From that, I can take it that these vast amounts of money were spent each year on advertising and general promotion of one kind or another.

Mr. Andrew Algeo

Those funds have been used entirely for the promotion of the national lottery, as stipulated by the licence.

Is that not a fantastic amount of money to be spending on promotion? Mr. Algeo was asked earlier to break out the figure, as he put it, but the figure is already broken out because the money has to be ring-fenced for promotion. We can safely say that, for PR and promotion, all of this money was spent. Therefore, we have a figure that is broken out from the company’s accounts. Can Mr. Algeo describe for me what promotion actually means? What comes under the heading of promotion in the accounts? Is it advertising?

Mr. Andrew Algeo

The definition of promotion is laid out in the licence. We conform to that definition.

Generally, what is that?

Mr. Andrew Algeo

The answer I gave is probably the most straightforward and concise one.

Could we at least be given a list of the headings under promotion and the percentages of expenditure under each of the headings in the years from 2015 onwards?

Mr. Andrew Algeo

I am sorry but we do not disclose how we break out our promotional activities because it is commercially sensitive.

Therefore, there is no way for me to prove to the general public that PLI actually spent €20 million in 2015 and €16 million in 2017. There is no way for me to comfort the general public with the fact that all the amounts we are talking about for each of the years were actually spent on promotion.

We do not know if there was a leakage from the amount of money into general supports for the company.

Mr. Andrew Algeo

The regulator has visibility of all figures and facts within PLI, including that.

We will take that up with him then. There are a number of times the lottery winnings have not been claimed. In 2020, €17 million was unclaimed. Is that right?

Mr. Andrew Algeo

That is correct.

How many prizes would that represent?

Mr. Andrew Algeo

It would comprise prizes of different sizes within each year. There are literally hundreds of thousands of prizes involved with such numbers. It is a very broad range of prizes from all forms of games that the national lottery sells.

Do the witnesses have a breakdown of those that they could share with the committee? Do they have a general response to the categories of prizes and the numbers unclaimed? Could that data be provided after the meeting?

Mr. Andrew Algeo

We break out the detail stipulated in our accounts of the prizes that go unclaimed. I can say that in general it really is a very wide range of prizes, although, as the Chairman might imagine, the larger prizes are more likely to be claimed, not least because PLI, as a condition of its licence, advertises extensively when a large prize has not been claimed. Such advertising can be heard particularly on local media when there is an outstanding large claim.

According to the witnesses, the €19 million prize will have to be claimed and there will be a winner.

Mr. Andrew Algeo

There is a winner in the case of all unclaimed prizes but it is just that in those cases, the individuals have not come forward to claim the prizes. The ticket has not been presented.

The top prize is now €19 million. That will certainly be won. There must be a winner.

Mr. Andrew Algeo

Under the proposal that we have put to the regulator and requested, the top prize on a given date in the future would be won either by somebody who gets all six numbers or if nobody gets the six numbers, by the winners in the tier below where there is a winner, such as in the match five numbers or match five numbers and the bonus number.

Is there not a greater possibility as unclaimed money goes into the lower tiers that there would be a greater number of unclaimed prizes?

Mr. Andrew Algeo

It requires more than one person to claim. For example, since the jackpot has been capped, much larger prizes are being paid to match five and match five plus bonus numbers. There have been 217 winners of those large prizes sharing €18 million over the period since the beginning of October. It is not a very large number of winners.

The company is a winner-----

Mr. Andrew Algeo

Last Saturday there were two, for example.

-----when it comes to unclaimed prizes. It is something it does not have to take from its balance sheet to promote the company.

Mr. Andrew Algeo

The national lottery ticket sales are the beneficiary of the promotion. The main beneficiaries of national lottery ticket sales are the players in prizes, good causes and retailers, as well as PLI in covering the cost of operating the business and return on invested capital.

Will the witness repeat that?

Mr. Andrew Algeo

Unclaimed prizes are used to promote the national lottery under the terms of the licence. Promoting the national lottery generates ticket sales. Ticket sales are distributed between players, good causes, retailers and PLI.

Okay. Does Mr. Algeo have a breakdown of the unclaimed prizes? I am specifically talking about physical tickets versus the online tickets. Is there any breakdown of that within the company?

Mr. Andrew Algeo

There are no unclaimed prizes in the digital channel because prizes would be paid to the account of a winner in the case of a digital ticket.

Okay. Those are my questions on unclaimed prizes. We can now move to the next stage of the committee, which involves the regulator. I thank the witnesses for attending today and I am sure we will have further conversations about this in future.

May I ask another question before we move on?

We have moved on but go ahead, Deputy.

I am sorry about that. When will the new and revamped game begin? I am referring to the winnable one.

Mr. Andrew Algeo

The existing game is winnable by evidence of the past six years. The amendment to the existing game, which relates to a must-be-won prize, will come into effect as soon as we can if the regulator provides permission.

I have a text from somebody who asks how this will be put into effect and whether somebody pull a lever, throw a switch or plug in something to enable the winning of the game. Those are the texter's words, not mine.

Mr. Andrew Algeo

We have been working for over two months now in perfecting the necessary changes in the systems, processes, governance and controls that would bring this change into effect. Any change to the game rules has a material effect on the technology and operations of the national lottery. That is tested, including by using independent people to help us ensure we have carried out those tests correctly. It is not easy.

I thank Mr. Algeo. I will come back to that in the next session.

As we are finishing this part of the meeting, we will briefly suspend while members reconnect via their next link.

Mr. Andrew Algeo

I thank the committee members and the Chairman.

Sitting suspended at 4.28 p.m. and resumed at 4.30 p.m.

I welcome Ms Carol Boate, Regulator of the National Lottery, and Mr. Derek Donohoe, deputy regulator and head of the audit and finance office of the Regulator of the National Lottery. The format of the meeting will be for Ms Boate to make some brief opening remarks, followed by questions from members.

I remind members and witnesses of the note on privilege, whereby they have full privilege if there are on the campus of Leinster House but if they are outside the confines of Leinster House they may have only have partial privilege.

I invite Ms Boate to make her opening statement.

Ms Carol Boate

I thank the committee for inviting me today to discuss issues relating to the national lottery. I am joined today by Mr. Derek Donohoe, deputy regulator and head of audit and finance. The Office of the Regulator of the National Lottery was established in 2014 as an independent regulatory office under statute by legislation passed by the Oireachtas, the National Lottery Act 2013. The regulatory role includes to procure the holding of the national lottery; to monitor and enforce compliance by the operator with the National Lottery Act 2013 and the 2014 licence awarded to it; to manage and control the national lottery fund to ensure the amounts going to prizes, good causes and the operator are correctly accounted for; to consider for approval certain matters relating to the national lottery, including schemes for national lottery games proposed by the operator; and to exercise the enforcement rights of any trademark of the national lottery.

I took up the role of regulator in 2017, following a career in competition and consumer protection law and policy. I am trained in economics, law, and regulatory governance. Our aim is to ensure a safe, sustainable, properly run national lottery maximising funds for good causes. I am assisted in this role by nine staff who are experienced in law, accounting, auditing, psychology, research, communications and risk management. As Regulator of the National Lottery, I and my staff work to ensure that the national lottery is run with all due propriety and that the interests of all those who participate in the national lottery are protected. While those who purchase tickets for the national lottery do so in the full knowledge that it is a game of chance, as are all lotteries, my office seeks to provide them with the confidence that the national lottery is being run to the highest standards of probity and consumer protection and that their interests are safeguarded.

The regulator’s office oversees the holding of national lottery games in several ways. Any new game, or any change to an existing game, must be submitted by the national lottery operator to the regulator for approval prior to launching the game. The regulator’s office then determines whether the scheme for the game is compliant with parameters set out in the Act and licence. Only certain game types are permitted, certain information must be made available to players and the game must complete extensive testing requirements. Every proposal from the operator goes through a rigorous set of checks by the regulator, the head of audit and finance, our legal and compliance team, and the head of player protection and research. Our objectives, given to us by the Oireachtas, are to ensure: the game is run with all due propriety; that the interests of players are protected; that the long-term sustainability of the national lottery is safeguarded; and, after that, we consider the return to good causes generated.

Commercial considerations such as the price of a ticket or the prizes to be won are reserved to the operator under the Act and the licence. The financial model in the licence incentivises the operator to maximise returns for good causes in the design of its games. In each game, 65% of the proceeds, after prizes, go to good causes and, after retailer commission and the regulatory levy, the remainder goes to the operator.

When a game is approved, my office then continuously monitors the operator to ensure that it is operating the game in compliance with terms of the approval, and the Act and licence. My office performs numerous checks and reviews across a broad range of aspects of the game and areas of the operator’s business - from ticket sales through to draw operations and prize claims - using a risk-based approach. We vary our checks and interrogations across the entire operation in order that the operator is focused on being compliant in all matters. Some examples of the checks and balances in place are as follows. There are strict tests and process protocols in place for how each and every draw is conducted. An independent company performs statistical checks on ball sets. The appointment of this company is approved by my office. Each week we review sales figures for every national lottery game and perform checks to ensure the proceeds are correctly allocated to prizes, good causes, retailers and the operator. We receive regular reports from the operator on the speed of prize payments, on who has access to the secure areas and on online play patterns. My office has conducted proactive expert reviews of the quality and capacity of the operator’s IT and communications systems, including its cybersecurity, to check that it is capable of operating the national lottery games with all due propriety. We monitor the advertising and public relations of the operator to check that the content and location meet the relevant standards and take enforcement action where required.

With regard to the current unprecedented rollover of the lotto jackpot, I can assure the committee the lotto game is operating in line with the game rules and there are no regulatory issues. Independent observers from KPMG attend every lotto draw, although they are not on camera any more, to ensure the strict protocols in place are followed to the letter. The €19 million cap on the lotto jackpot is part of the game rules introduced in 2015. The cap allows prize moneys that ordinarily go to growing the jackpot to go instead to growing the value of the next highest prize won and this flow-down of prize money has been operating correctly. Since the lotto jackpot reached its cap on 29 September, 215 players have won much larger amounts than would ordinarily be available for matching five numbers or five numbers plus the bonus ball, 27 of these players won prizes ranging from almost a quarter of a million euro up to €1.25 million, and the remaining 188 won match five prizes ranging from €22,872 to €35,234.

Importantly, the split of the proceeds from lotto sales are, and have been, the same in every draw, regardless of the jackpot level. For every euro spent on lotto tickets 52 cent go into prizes, 31.2 cent is returned to good causes, 6 cent go to the retailer in commission and the remaining 10.8 cent go to the operator from which they pay the costs of operating the game.

The current extended period without a jackpot win is unusual in the history of the game but it is not unusual in the history of lotteries. Statistically unlikely events are part of the nature of games of chance and lotteries. It was also statistically unlikely that the lotto jackpot would be won three Saturdays in a row and yet this happened at the end of May and over the June bank holiday weekend earlier this year when players won jackpots totalling more than €11 million in three consecutive Saturday draws. Lotto sales have attained sustained high levels since the record-breaking jackpot was reached and good causes have benefited significantly from this. Approximately €46 million has been earned for good causes by lotto since the jackpot was last won.

I have provided further details to accompany my statement that I hope is helpful to the committee in providing an overview of the role of the regulator. I look forward to answering any questions the members may have.

I thank Mr. Boate for that. I call Deputy Durkan.

I welcome the regulator to the meeting and thank her for her opening statement. Has she a response to an injudicious text I received from a constituent to the effect that he inquired whether some change would be made? He asked if a handbrake, lever or switch had been pulled or if some technical or IT change had taken place that might have brought this into focus in June and currently would it be done to level the playing pitch once again, as he would see it. For instance, from here on in, what will change that did not change before? If we have the same technology, draw, lottery and methodology, how will it be possible to change from a non-winnable to a winnable situation without somebody, somewhere, changing the technology? That is what that constituent is saying.

Ms Carol Boate

The answer is that a change to the technology is required to bring in a must-be-won feature to Lotto. Lotto has always been a game where if you match the six numbers, you win the jackpot. If we are to bring in a feature whereby even if there is no winning ticket matching the six numbers drawn the jackpot money will be won because all of it will roll down to the next highest prize won, that requires a change in the technology. Those are the kinds of checks my office is currently performing. They include, for example, what is the mechanism that will be applied to make that happen, how it is being tested and whether it will be tested sufficiently and appropriately to make sure it operates correctly every time. Those are part of the checks my office conducts any time a lottery game is amended. The other kinds of checks we have to conduct on this proposal include, for example, how the mechanism is described in the game rules. First, what kind of a must-be-won feature will it be? As some Deputies have outlined, different kinds of must-be-won features can be introduced. What exactly is the one the operator is proposing and how is it described in the game rules? I have to be sure there are no unintended consequences in the future. I want to make sure it is correctly and appropriately described in the game rules. We also check for the impact on the risk of the game to players.

Can Ms Boate advise the committee on whose initiative or by whose volition did it occur that a change would be made to make the major prize winnable? Did she approach the lottery operator directly or did the lottery approach her and when did that take place, if it took place?

Ms Carol Boate

As I mentioned in my opening statement, it is the role of the operator to design, operate and promote the games and to make proposals to me if it wishes to change the game and then I check if those proposals are in order. It was the operator’s initiative to see if it could bring in a must-be-won feature.

It was first mentioned to me in early November that the operator was examining exactly what technology changes and tests might be required, including how long it would take to perform all those tests, so that in the event that the lotto jackpot continued to roll over for an extended period, it could apply for such a facility to be brought in. When the operator decided it did want to bring this in, the actual application came in on the evening of 7 December.

Members of the public have raised the issue of whether the technology surrounding the national lottery could be interfered with externally or hacked. If that is so, what prevention measures have been taken? For example, if the HSE was hacked, it is quite possible that somebody somewhere would attempt to do so with the national lottery, which has a rolling prize of €20 million or thereabouts and several other prizes. Will Ms Boate tell me, if she can, the methodology used to prevent that? Some methods may be electronic and some may be technical.

Ms Carol Boate

Cybersecurity has been a top concern for all major businesses over the past ten years. Towards the end of last year, I sent in expert independent IT consultants from the firm Grant Thornton to conduct a review of the quality and capacity of the operator's IT systems, specifically including its cybersecurity preparedness. I received that report earlier this year. Based on its findings and other evidence and information available to me - I get regular reports about aspects of its systems - I am confident that the operator is taking all the appropriate steps to protect the national lottery from cybersecurity attacks.

When did Ms Boate get that report?

Ms Carol Boate

The end of quarter 1 of this year, which was around March. The fieldwork was conducted in the last quarter of 2020.

Has the regulator ever made inquiries as to the amount rolling around in unclaimed prizes that seems to fall into the promotion of the lottery, which is a self-serving exercise, to encourage people to play more, spend more and, for want of a better description, invest more in the lottery?

Ms Carol Boate

I have an active role regarding that element of the licence. The licence requires that expired unclaimed prizes are given to the operator, in the first instance, to spend on promoting the national lottery. At least once a year, I get a report on how much money has expired in unclaimed prizes and how much money the operator has spent on marketing and promoting the national lottery. I am able to compare those, in addition to other reports going on in the background, to ensure and check that the money is being correctly spent in accordance with the terms of the licence.

Is Ms Boate happy with that?

Ms Carol Boate

I am happy that everything I have seen suggests that the operator is fully compliant with the terms of the licence. It is not unusual for a budget to be created for the operator in the design of a licence. I noted some earlier comments about the UK model and I have looked into this previously. In the UK model, expired prizes go to good causes. However, money is also regularly taken out of good causes and given to the operator to promote the national lottery, which I believe is of a similar order to the design of our licence model. It is not an uncommon feature of lottery licences.

Is it not the case that the amount in unclaimed prizes is very substantial and is consistently so year after year? Does how that money might be used in the promotion of the lottery not cause some concern? It might be used to encourage more people to spend on the lottery, while at the same time it could be used as a means of preventing people from winning because of the particular system that now operates.

Ms Carol Boate

I do not understand how advertising could be used to prevent people winning. The idea is that it is used to promote the national lottery, keep it front of mind and keep people informed of the latest jackpot and latest gains so that they will purchase national lottery tickets. I do not understand how it could have-----

For example, if money is used in market research and development, could some of that €17 million or €20 million, or whatever it is in unclaimed prizes, which is a significant amount, also be used to determine ways and means to ensure that there are less winners or less possibility of winning? It goes back again to my texter. He is obviously suspicious that there is a machine somewhere that predetermines what happens. Is Ms Boate satisfied that is not the case?

Ms Carol Boate

I am very satisfied that it is not the case that games are predetermining how often they are won. Going back to the example of the lotto draw, we still use ball machines for that. It is a physical draw that takes place on live television. Everybody can see the balls that are drawn and the winning combination. Everybody who has purchased a ticket has a copy of it. It is very transparent. We do not use random number generators such as those used in other jurisdictions. Again, we use the ball machines for daily million, EuroMillions plus and other games that are similar but not broadcast on television.

I have a final question. Who has access? Who are the custodians of that technology or mechanisms that are used to determine, by the ball system or whatever it is, who the winners are? Who has access to that? Where is it stored? Can people bring it home with them at night, for instance, when they are working from home or whatever the case may be? Will Ms Boate shed some light on that? I thank her for her replies to the questions.

Ms Carol Boate

I thank the Deputy. The technology that runs the national lottery is a web of hardware and software processes and procedures. The core gaming system is one designed to record all the tickets sold and all the prizes won to be paid out. That came from an international company that specialises in these types of systems, of which there are only a few in the world. That is held by the national lottery and only certain staff members are allowed access to it. They certainly could not bring it home.

Perhaps one of the useful things to understand is that a separate independent verification system is being operated at the same time to also record all the tickets that are being sold for the draw. It is operated by a separate independent team and the draw is only allowed to take place if those two systems match.

I thank the regulator for her opening statement and replies to Deputy Durkan. I will pick up on her initial replies to him. She said, in line with what the previous witness said, that PLI had mentioned in early November the prospect of a must-win draw, which it subsequently requested on 7 December, eight days or - correct me if I am wrong - two draws ago. Had it ever mentioned it before then?

Ms Carol Boate

My recollection is that the first time PLI suggested to me that it was considering bringing in a must-be-won draw to bring this rollover to a close was early November. I checked my records and that is my earliest recollection of it being mentioned to me.

In the very recent history of PLI being the operator, has there even a discussion of a must-be-won draw? Is this something that has been invented to address a growing concern highlighted, as I mentioned, by Deputy Durkan, or is this common practice in other games across the world? Would this be happening if very serious attention was not being given to it, by this committee and others?

Ms Carol Boate

The proposal before me now is to address the current circumstances. That is what PLI has stated in its proposal. In general, I am afraid my hands are rather tied in discussing the general commercial plans and considerations of the operator. It has many ideas and things in the pipeline.

The regulator oversees the Irish lottery but we can compare it to the UK, European and a dozen different American models. Quite simply, is a must-win draw a regular occurrence or common practice in this type of gaming?

Ms Carol Boate

Yes. From the little that I know about lotteries in other jurisdictions, must-be-won features are definitely not uncommon.

I have approved it in EuroMillions previously. I believe it has always been a feature of EuroMillions, although I am not quite sure. Other lotteries do not have them at all. In the UK example presented earlier, the money rolls down every five draws. That is quite-----

That has never happened in Ireland before.

Ms Carol Boate

To the best of my knowledge, the lotto has never had it. There are other examples. The lottery in Italy does not have it. The main game in the lotto there rolled on for more than a year and was only won in October 2019 despite operating three times a week.

Did Premier Lotteries Ireland ever discuss increases in the number of balls or the general issue of rollovers before?

Ms Carol Boate

I would prefer not to discuss any commercial plans PLI may or may not have but with regard to-----

These are not commercial plans but contingency plans. What I am referring to is a matter of public interest.

Ms Carol Boate

Is the Deputy asking whether, in respect of the current rollover, PLI ever discussed-----

Yes, there is currently a rollover but, as Ms Boate mentioned, there was a rollover in Italy for more than a year. When considering the risks involved in a game in this nature, I would hope that someone regularly thinks about these matters and discusses them with the regulator.

Ms Carol Boate

It is a known risk that this can happen. It was also a known risk under the previous game. When the lotto involved matching six numbers from 45, this also could have happened. It would have been highly unlikely, but it is also highly unlikely for it to happen under this framework. We are talking about degrees of how highly unlikely it is. I do not know why consideration was not given to including some kind of "must be won" feature in the event this highly unusual situation arose but I do know that this was never proposed to my office and approved. When the game was redesigned in 2015, this did not form part of the proposal.

By their nature, games of chance all bear a high degree of unusualness. Moving on, when was the independent observer appointed?

Ms Carol Boate

Is the Deputy referring to KPMG, which-----

Ms Carol Boate

I am afraid to get the answer wrong but, from my recollection of our list of approvals, it was early on in the licence period, perhaps in 2015 or 2016. Whenever the last contract came to an end there would have been a new contract for an independent observer. It was early on in the licence period, around that time.

Going back to previous contracts, has there ever been any other independent observer?

Ms Carol Boate

I am afraid I do not know. I only know what was approved under this licence. KPMG-----

From my childhood recollection, it seems to have always been KPMG. Indeed, I always remember the very pleasant gentleman who used to nod at the start of the draw. When we talk about the independent observer, which is consistently the same company, I wonder what the application or tender process for that very important role is.

Ms Carol Boate

The operator runs the tender process for that important role. I then have a role in approving that appointment. All key contractors, such as KPMG, the gaming system provider and the cleaners who clean the room where the machines are kept, are subject to approval with regard to their fitness and probity. I also must ensure there has been a proper tender process. We check that an appropriate tender process has been run for contracts of this nature.

How much is the contract worth?

Ms Carol Boate

I do not know off the top of my head and, even if I did, I imagine I would not be allowed to reveal that information.

I remind Deputy Richmond that we are obliged to finish at 5 p.m. sharp.

I will hand over to Deputy Mairéad Farrell. I thank the regulator very much.

I ask the Chair exactly how many minutes I have because he will want to contribute as well. I will be as quick and brief as possible.

I will forgo speaking but I have to finish at 5 p.m. on the dot.

That is perfect. I will make sure to keep the questions as quick and easy as possible. Perhaps the answers could be as well, if that is okay. I missed some of the debate because I had to pop out for another meeting. Why does this State differ from other jurisdictions with regard to regulatory oversight? Why does responsibility for the national lottery remain with a regulatory body and Government Department separate from those responsible for Paddy Power and so on? What is the reasoning behind that? If we look at other jurisdictions such as Britain, Sweden and France, we see that one independent regulator oversees the whole gambling sector, including national lotteries. Will Ms Boate comment briefly on that?

Ms Carol Boate

My office was established in 2014 and was necessary for the licence to be awarded. It was part of the awarding of the licence that there would be an independent regulator who would approve games and so on as opposed to the Minister doing so, which was the previous system. There was a necessity for a regulator at that time. As to whether we would ever be merged with a gambling regulator, that is a matter for government.

Gabhaim buíochas as sin. I have a question arising from a question Deputy Tóibín asked in the previous session. I took a quick look at the audited financial statements of Premier Lotteries Ireland. It was a brief look so I am open to correction if I have got this wrong but, from what I can see, PLI paid no tax in 2019. It actually got a refund of €100,000. It paid tax in 2020. I note from its financial statements that the shareholders of PLI have given it significant loans. Note 19 in the financial statements says that non-current liabilities, which total approximately €250 million "represent the balances repayable to the Company’s shareholders [...] which are repayable by 2034 and bear interest at a rate of 9%." Obviously, we know that interest rates are extremely low at the moment. This is a very high rate of interest for a company such as Premier Lotteries Ireland to charge. It is above market rates. Why would shareholders charge a company that they own such a high rate of interest? Is Ms Boate concerned that such interest rate payments may be reducing the money that is due to the taxpayer?

Ms Carol Boate

The arrangements the Deputy has just described are corporate arrangements of PLI and fall outside my remit. We keep an eye on them to make sure there is no question that the company is not complying with the laws of the land and that there are no questions around its solvency but, as no questions of that nature arise, those are really private matters for the company. My job is to make sure that the amount of money being returned to good causes is correct.

I thank Ms Boate. It just seems unusual for a company that is profitable. I understand that this does not fall within the regulator's brief. We are under time pressure so I will move on. In respect of the distribution of funds to good causes, the regulator is concerned with proper administration. An issue that has been raised with me is that, under the model in England, an entirely independent body administers the funding to good causes while, under the Irish system, the decision lies with the Minister. I would like to look at how the funding is allocated. It has also been raised with me that successive Ministers responsible for the environment and national heritage have failed to request funding given that it would impact on the discretion of their colleagues to benefit causes in the constituencies. The natural environment was added as a beneficiary under the Act in 2013 but it has not benefited since. Does the regulator have any comment on transparency in that regard? It is something that has been raised with me and it is an interesting point.

The Deputy will have to conclude on that.

Ms Carol Boate

My role is to make sure that the amount of money coming from national lottery ticket sales that is due to good causes is correctly accounted for. We transfer that money to the Exchequer. I am afraid that what happens afterwards is not within my remit. However, I know the Minister is aware and concerned that there could be more transparency with regard to how one accesses national lottery funding and where it goes. He has commissioned Indecon to prepare a report for him on that issue. I believe that report is due in the new year. Perhaps that will shed more light on the issue for the Deputy.

I thank the witnesses and members for attending today. We appreciate their contribution. I bring the attention of members to the private meeting to be held at 5.15 p.m. because of the lateness of this meeting.

The joint committee adjourned at 4.59 p.m. until 1.30 p.m. on Thursday, 16 December 2021.