The purpose of this Bill is to give effect to the Government's undertaking to establish a national lottery first set out in their White Paper Building on Reality in October 1984.
As I said in my speech to the Dáil, lotteries have a long history going back to the 15th century. When it was discussed in the Dáil some Deputies suggested that the history went back beyond that but my research did not go back beyond the 15th century. The establishment in Ireland of a national lottery is not, in international terms, a very unusual step. State lotteries exist today in over 80 countries. Among our partners in the European Communities, State or national lotteries are established in the Federal Republic of Germany, France, Belgium, the Netherlands, Luxembourg, Denmark, Spain and Portugal. Britain, of course, has its football pools. In the United States lotteries exist in some 22 states, including New York, New Jersey, Maryland and the District of Columbia.
Before I come to some specific aspects of the Bill I should like to outline the considerations which determined the general thrust and shape of the legislation. Public trust and confidence is of crucial importance in the operation of state lotteries. Such trust can only be secured and held by comprehensive legislative provision which demonstrably protects the public interest and guards the integrity of a national lottery on behalf of prospective participants. It is, accordingly, appropriate that the legislation should provide for the award by the Minister for Finance of a licence to operate the national lottery to a body in which he can be satisfied that the public interest can be safeguarded. As the House is aware, after due consideration of the matter the Government decided to award a licence to operate the national lottery to a subsidiary of An Post. The general enabling provision to award the licence is contained in section 3.
A matter which may be of concern to Senators is the question of the purposes to which lottery surpluses are to be applied. These were not specified in the Bill as circulated but in response to the debate in the Dáil I have decided upon an amendment to section 5, the relevant section of the Bill, which will be more specific as to the purposes for which lottery funds will be used. These purposes, as already announced by the Government, are sport and recreation, national culture, including the Irish language, the arts and health. The needs of sport were very much to the fore in the Government's thinking when drawing up plans for the lottery. I am convinced that we will see in due course substantial support from the lottery funds for projects in the sporting area. A strong case has also been made for funding for the arts and national culture. There have also been calls to support various other causes including those charitable and voluntary organisations which operate in the health area. The areas identified by the Government to benefit from the national lottery a balance of deserving causes to be given assistance from the lottery.
There will, of course, also be provision to extend the list of purposes should the Government so decide. Any addition to the list of purposes to be contained in the Bill will have to be published in Iris Oifigiúil. Moreover, through the process of allocation of funds, the Dáil will have the opportunity to consider all the purposes for which the funds are used and the entire proceeds of the lottery will be accounted for in a completely visible manner.
The legislation needs to allow for extension of the purposes in order to cater, for example, for arrangements which may become necessary in relation to existing charitable and voluntary lotteries when the national lottery becomes operational and also to allow the Government flexibility to meet other beneficial community purposes which may arise in future without having to amend the Act. There need, therefore, be no fears among Senators that lottery funds will be absorbed into general public expenditure purposes.
I wish now to turn to the question of the impact of the national lottery on those existing lotteries operated by voluntary and charitable organisations. The Government when announcing the national lottery indicated that consideration would be given to measures, including changes in the existing legislation governing prizes, designed to ensure that the activities of existing lotteries could continue. The Minister for Finance, in his budget speech of 29 January 1986, reiterated that the Government's intention to ensure that the good work funded by existing charitable and other voluntary lotteries which operate nationally does not suffer as a result of the national lottery. Extensive discussions have taken place with those voluntary organisations, charities or umbrella groups that had earlier expressed disquiet at the possible adverse effects of the national lottery on their fund-raising.
Specific measures are being provided in the Bill to help existing lotteries to compete. Section 33 will enable the Minister for Justice to improve the prize limits at present specified in the Gaming and Lotteries Act, 1956 for lotteries operated under Garda permit or licence from the District Court and also will exempt such lotteries from the restrictions on advertising and publicity set out in section 22 of that Act. As I informed the Dáil, the Minister for Justice has new prize limits of the order of £3,000 for lotteries under permit and £10,000 for lotteries under licence in contemplation. I believe strongly that these measures will provide adequate opportunity to those bodies concerned to compete successfully with the national lottery.
Only time will tell how, if at all, the national lottery will affect the situation of the bodies who hold existing periodical lotteries. However, I have already given an assurance that where such bodies can demonstrate satisfactorily that the lottery has adversely affected their receipts, the Government are prepared to take steps to make funding available to them from the lottery's surplus. To conclude on this aspect of the Bill, I regret to say that there appears to be some misunderstanding about the participation of charities or voluntary bodies in selling tickets for the national lottery. Such participation would not be consistent with the intention to support, not to supplant, existing charitable fund-raising. Moreover, the best technical advice indicates that sales outlets should be fixed retail business locations which will have to satisfy a number of criteria from a business and security point of view.
Coming to the specific provisions of the Bill, there are largely self-explantory; an Explanatory Memorandum has also been provided so I propose to refer only to a few specific provisions in any detail.
In addition to my proposals on section 5, I might mention at this stage that a number of amendments covering minor drafting and presentational aspects of the Bill as circulated have been dealt with during its passage through the Dáil.
Section 4 provides that the total value of the prizes to be distributed by the national lottery must not be less than 40 per cent of the total amount received in respect of national lottery ticket sales in any financial year of the authorised company. I would point out that this is a minimum and the amount returned in prizes could be more.
Section 6 is an important provision of the Bill. It provides for the appointment by the Minister of an independent scrutineer who will examine on the Minister's behalf the operation of the national lottery in order to ensure its integrity and to guard against fraud. The scrutineer is not intended as a substitute for or aide to the auditor who will in the normal course under the Companies Acts audit the balance sheet and accounts of the authorised company. His function will be to act as the Minister's and the community's watchdog over the operation of the national lottery to ensure its correct and proper functioning.
Section 7 provides for the appointment by the authorised company of ticket sales agents on such terms as the company may determine with the consent of the Minister. Lottery tickets may be sold only by the company or by its sales agents and may not be sold to anyone under the age of eighteen years. The purchase of tickets on behalf of those under eighteen years, for example as presents, is not however to be prohibited. Section 7 also makes it an offence for certain categories of person, for example, directors or employees of the authorised company, to own a national lottery ticket.
Section 8 provides for the establishment under the Minister's management and control of a national lottery fund at the Central Bank. All lottery receipts, with the exception of sales agents' commission and any "instant" prizes payable in any lottery game at point of sale, will be paid into the fund from which the authorised company's remuneration and operating expenses will be paid. Prize moneys will also be paid periodically en bloc from the fund to the company for distribution. Surplus moneys in the fund are to be remitted at least annually to the Central Fund. Section 9 provides for payment of remuneration due to the licensee from the fund.
Section 14 provides that the number of directors of the authorised company shall be seven including the chairman and sets out their mode of appointment. The Government envisage that An Post will nominate four of the seven directors of the subsidiary company, including the chairman, with the consent of the Minister, who will nominate the remaining three directors.
I do not propose to refer in detail to the remaining relatively standard provisions such as those regarding memorandum and articles of association, share holdings, accounting and financial arrangements. I might mention the following sections as of particular note:—
Section 28 provides that a scheme of rules in respect of each lottery game in the national lottery must be prepared by the authorised company for approval by the Minister. Only those games in respect of which such a scheme has been provided by the company and approved by the Minister can be operated by the company.
Section 29 enables the Minister to issue such directions as he considers necessary or expedient in the public interest to the authorised company. Section 30 as well as giving the Minister certain powers of share acquisition provides for the appointment by the Minister if he so thinks fit at any time of a manager who would, in terms of the section, take over the management of the authorised company as a going concern.
Section 31 confines the use of the names "National Lottery" or "Irish National Lottery" to the Minister, the licensee, the authorised company or a person so authorised by any of these. A person who uses these terms unlawfully will be guilty of an offence.
Section 32 exempts the national lottery from the provisions of the Gaming and Lotteries Acts, 1956 to 1979.
Section 33 authorises the Minister for Justice to amend by regulations sections 27 and 28 of the Gaming and Lotteries Act, 1956 by altering the prize limits specified in subsections (2) (b) and (4) of section 27 and subsection (2) (c) of section 28 of that Act. Lotteries held pursuant to sections 27 and 28 are also exempted from the provisions of section 22 of the Gaming and Lotteries Act, 1956 in relation to advertising.
With particular regard to the latter measures I have mentioned, the Government believe that these measures will enable the lotteries in question to operate successfully after the start of the national lottery. It is not of course the Government's intention that the national lottery should supplant or replace the present fund-raising activities of voluntary and charitable bodies. The loyalty of subscribers and participants in existing permitted or licensed lotteries will ensure that these are still a substantial source of funding for the voluntary and charitable organisations concerned. I believe that the start of the national lottery will in no way diminish this loyalty, which is rooted in a deep appreciation of the excellent work which charitable and voluntary bodies undertake in our community.
In the event that, despite these measures, it can be shown that the net income to charitable and voluntary bodies from the lotteries they operate has declined as a direct consequence of the activities of the national lottery, I have given an assurance in the Dáil that the Government will be sympathetic to their situation in deciding on the allocation of the national lottery's proceeds.
I would like to conclude by commending this Bill to the House and assuring Senators that the Government's wish is to see the beneficial causes which have been identified begin to benefit as soon as possible from the national lottery.