I welcome our guests in the Gallery. Perhaps we should display the best of order for them in order that they will be impressed by how we do our business. I welcome the Minister of State. Senator Ward was in possession and might wish to resume.
National Lottery (Amendment) Bill 2021: Committee Stage (Resumed)
SECTION 1
Question again proposed: “That section 1 stand part of the Bill.”
We may need to hear from the Minister of State at this stage. It was anticipated that amendments to section 1 would be proposed because in early course in the discussion on the Bill the Minister of State had identified that the Department felt there were drafting errors that needed to be corrected. I do not have difficulty with that. The suggestions were reasoned ones. As we came here today for the resumed Committee Stage, I expected to see Government amendments to make those corrections. That has not been done and I am not sure what the basis for that is because I have not had any correspondence from the Department on that. Perhaps the Minister of State might wish to address that.
I am happy to speak about my view and the Department's view on what we need to do to progress the Bill. I would like to speak about it even though we do not have Government amendments. I would be happy to respond to any comments or questions from Senators.
I would like to hear the Minister of State’s rationale first and then I may have some questions.
The Senator may re-engage on Committee Stage.
I would like to engage with the Minister of State today.
The Senator may come back in if he is unclear.
I am clear, but I want to be extra clear.
One should never assume that Senator Boyhan is unclear about anything.
I am just here for the gender balance.
And to keep the see-saw.
Does Senator Carrigy wish to speak?
I want to speak, but if you want the Minister of State speak first-----
If Senator Carrigy wants to make a comment before the Minister of State comes in, he said he would take them.
I can answer questions Senators have during the session.
I will let the Minister of State speak on it.
Senator Carrigy will be first then.
I thank Senators Ward, Currie and Carrigy in particular for affording me the opportunity to again consider the national lottery, its contribution to good causes and how it might evolve and develop in the future. Since its inception in 1987, though good times and bad, the national lottery has continually provided a steady stream of funding for good causes in the areas of the arts and culture, sport and recreation and various voluntary, community and local activities.
I will not go through all the detail that was mentioned in February, but some key highlights are worth mentioning. In 2021 the national lottery contributed €254 million to good causes. The total expenditure on those causes was €425 million. In 2022, the contribution of the national lottery is estimated to be €290 million. This will amount to an aggregate €453 million for those good causes. While we still have several months to run until the end of the year, a healthy increase of 14% is estimated this year in national lottery funding for good causes. Among the several beneficiaries in 2022 will be: artistic endeavours supported by the Arts Council; Irish language support schemes; sporting bodies, sports and recreational facilities and projects and activities supported by Sport Ireland; private housing grants; the Heritage Council; youth organisations and services; the senior alerts scheme; the community and voluntary sector; the Society of St. Vincent de Paul; and Protestant Aid.
There are different perspectives on the aims and approach of the Private Members' Bill before us. We all share a common appreciation of the value of the national lottery in funding good causes in addition to what the Exchequer contributes. Some good causes might have suffered even more during the financial and economic crisis a decade ago without the continuing support provided by the weekly purchase of national lottery products. We all want the national lottery to continue to make a contribution to good causes.
The Minister for Public Expenditure and Reform, Deputy Michael McGrath, commissioned Indecon to carry out a report on the current allocation of national lottery funding to and its utilisation by Departments. Among other things, Indecon was asked to: examine best practice in other jurisdictions; develop policy options to enhance the connection between national lottery sales and the allocation of funding to good causes; monitor and report on the impact of funding allocated; and identify new areas for funding allocations.
Indecon also carried out consultation with various stakeholders in March and April of this year as part of its work. Indecon carried out an omnibus survey of the general population last November. It is expected that the final Indecon report will be available in the near future to the Minister for Public Expenditure and Reform for his consideration. It is reasonable to assume that the findings and implementation of recommendations of the Indecon report will help secure and consolidate public support for and confidence in the national lottery as a vehicle for raising valuable funding for good causes in Ireland. Full consideration of the report could also provide a useful basis for the consideration of any legislative initiatives regarding the national lottery.
It is also worth referring to the prospective establishment of the gambling regulatory authority which I think is of relevance in this context. The gambling regulatory authority, which is to be established under the prospective gambling regulation legislation, will operate as an independent regulator under the aegis of the Department of Justice. It is intended that the authority will regulate gambling, gaming, and lottery services by both the commercial and non-commercial providers of such services, including their advertising, in order to achieve a high degree of compliance with the gambling regulatory legislation.
The process of appointing a CEO designate for the gambling regulatory authority is in train and it is hoped that a successful candidate will be identified in the coming months. The pre-legislative scrutiny phase was completed earlier this year. It is also expected that the Bill to establish the gambling regulation authority will be published after the summer.
Of course, the national lottery itself is well regulated by the office of the Regulator of the National Lottery. The establishment of the gambling regulation authority of itself will help establish a level playing field for gambling activity in Ireland.
I must at this stage recall that in the debate last February I referred to certain legal hurdles that proposed legislation such as that before us today would have to get over. Legislation in this area would need to be compatible with EU law. Specifically, I instanced the challenge of addressing the issue of proportionality in justifying a complete ban on a previously legitimate and legal business activity that has been in place for 30 years or so. There would be a need to show overriding reasons to justify a complete ban as a non-discriminatory and proportionate means of achieving legitimate objectives in the public interest. It seems likely that some very considerable work would be necessary to mitigate and manage any legal risks that could arise in respect of legislation along the lines before us today.
The European courts seem to have been very strong in their view that raising public funds does not by itself constitute a legitimate reason for governments to take actions in regard to the rights of lottery competitors to trade. This is no small issue that will have to inform the drafting of legislation like that before us today.
In conclusion, it is not proposed that there would be any Government amendments put down to this Bill today. First, it is considered that much more work would need to be done on working through the various legal issues that would surround such legislation. Ensuring that legislation is robust and defensible against challenge is a fundamental feature of drafting and proposing legislation. Second, it seems prudent and appropriate that any initiatives in this area should be considered in the context of the prospective establishment of the gambling regulation authority. Engagement with the authority about the issues around the Bill before us today and about its objectives and rationale seems sensible. Legislation could well be enhanced by such engagement.
Finally, it seems worthwhile to consider how the findings and recommendations of the Indecon report might strengthen and reinforce the links between good causes and national lottery funding. We all wish to see that relationship maintained and supported.
I thank the Minister of State and call Senator Carrigy.
I indicated first but I am happy to go along with the Leas-Chathaoirleach.
We will get the Senator in. He should not worry.
That is not the point. On a point of order, I have no difficulty but I did indicate first to come back in. The Leas-Chathaoirleach acknowledged that.
The Senator indicated earlier.
No, he was not in the room when I spoke. I bow to the Chair's decision.
Senator Carrigy should go ahead and then we will get Senator Boyhan in.
You will not get me then. Sorry.
I think there is too much heat in the room.
For the Leas-Chathaoirleach possibly.
I want to support the Bill. I am one of the 5,000 agents in the country who has been losing money for the last 20-odd years. In my case it is in the last 15 years as an agent of the national lottery because we do not earn any income from the sales and because the sales are being made in the bookies. The media has highlighted the significant amount - the €60 million-plus - that is lost to the good causes fund that distributes money throughout the country in areas of sport and health. That is what the focus of the legislation needs to be. That money is lost to the Exchequer which allows us pay out. In the last months we highlighted the €100 million or so that the Minister of State, Deputy Chambers, announced. Had we not the income from the national lottery, we would not have those funds. Therefore, I want to put on record my full support for the Bill.
I will not waste my time talking about the negatives. Were I the proposer of this legislation, I would be very disappointed. This is a Government Minister of State coming in to three Government Senators to more or less tell them that there is a lot of work to do, there is huge concern, there are legitimate objectives, and there is public interest but in conclusion it is not proposed to do anything. I would be shocked and shattered. I would expect that kind of treatment directed towards this side of the House or to me. I must say I am disappointed.
Section 3 of the Bill talks about amending section 46 of the principal Act to make it a criminal offence for the bookmaker to use national lottery or any other products for the purpose of a betting offer by increasing the penalties. It is all reasonable. I commend Senators Ward, Currie and Carrigy on the work they put into the Bill, and they have clearly put a lot of work into it. They believe in it. Others have been in touch with us about the Bill. For the Minister of State to say they can go off on their holidays and they have a lot of work to do, let us be honest, I do not know if it is a surprise to them. Whether the Minister of State engaged with them before - I do not need to know - I would be very disappointed if I had gone to this trouble. I wish them well. All they can do is continue to work away at it. I hope that after the summer they will have done a bit more work as the Minister of State has asked of them.
I thank the Minister of State and welcome him and his judgment. This Bill has been before the House previously and we discussed it at length. The Minister of State took on a lot of the practical complications that were involved in the Bill. Senator Ward put a lot of work into it and I commend him on what he is trying to do with the Bill. I have serious concerns with part of it as I have said here before. I made quite a strong case and I am delighted the Minister of State has listened to our case.
I welcome the Minister of State. This has been going on for some months. Some points have been made but I wish to highlight additional information and facts. Going back a little before we go forward, the national lottery licence was sold in 2013 for 20 years. It was sold in the context of the market conditions at the time. Since then, it was changed from 45 numbers to 47, further reducing the chance to win. The addition of two numbers meant that the odds of picking all six numbers reduced from 8 million to one to 11 million to one. That is a huge decrease. No doubt that was a factor in it not being won for well over six months last year.
The millionaire raffle is another example of how consumers are worse off under the private operators who took over the lottery. The Easter millionaire raffle in 2013 had a maximum of 180,000 tickets sold at €20 per ticket. The Christmas 2022 millionaire raffle had a maximum of 500,000 tickets sold at €25 per ticket. The revenue in 2013 was around €3.6 million of which €1.7 million was returned in prizes. In 2022 it was €12 million revenue of which €2.1 million was returned in prizes. You do not need to be a mathematician to understand that. It is an incredible and unjustified increase by any stretch. It is simply greed because the operator can do this and there is no competition.
My understanding from my research is restrictions that stopped the lotto from operating online were removed as part of the sale. Immediately after the licence takeover, scratch cards that cost €10 and €20 were added. These can also be purchased online, which I believe is a dangerous trend. In 2020, following an investigation, the national lottery regulator found the operator had breached three provisions of the National Lottery Act 2013, as well as its licence with the State, by omitting top prizes totalling €180,000 from three scratch card games, one of which was held in 2015 while two others were held in 2019.
At the time this licence was sold, bookmakers were operating in these markets as they have done for decades. It is problematic that the State would now intervene to alter the landscape for private operators that also provide gambling products to, in effect, create a monopoly in favour of one operator. I find it even more problematic that it would be done in favour of a private operator in areas where it currently has a complete monopoly, such as, for example, the millionaire raffle. It just does not seem correct. It must be noted that until 2033, the lottery will be majority owned by a Canadian investment firm that is making large profits and has paid hundreds of millions in dividends since gaining this licence. Many people like the option of doing fewer numbers in the bookmakers to increase their chances to win at a much lower price, especially since the operators of the lotto increased the minimum play by 33% following the takeover, with the minimum cost rising to €4 from €3, as the Minister of State will be aware.
I would like balance but what is being suggested is the State should intervene in the market between private operators that both offer gambling products, thereby creating a monopoly for one and removing the option for people who wish to gamble on the lotto at a much lower cost with fewer numbers. It is a suggestion that should be considered very cautiously.
I have to agree with Senator Boyhan. I am disappointed. There was previously a very clear indication from the Government that it was in favour of this legislation. In fact, I am aware of correspondence between the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and the Minister of State at the Department of Justice, Deputy James Browne, which was put into the public domain, that the former wanted exactly this kind of legislation to be put in place. As it happens, it crossed with this Bill, which was published a few days later having already been with the Bills Office.
What is in the Bill is a proportionate and reasonable attempt to do exactly what the Minister, Deputy Michael McGrath, has said he wants to do. On the last occasion, we were told there were problems, which I accept, with drafting the definition of a betting offer - that now appears to have exited the concerns of the Department - and problems relating to legitimate expectation. The latter no longer exist because the Minister of State should know that in bringing forth legislation, legitimate expectation concerns cannot arise. This is something that has been done in the UK, for example. No issue arose in respect of legitimate expectation at a time when the UK was a member of the European Union. Exactly this kind of restriction was placed on gambling offerings in the UK and no issue arose from that.
We now have a situation where we are told we need to wait - I think this is what the Minister of State is saying - for the outcome of the Indecon report. That is news to us, given this Bill was published in April last year and it appears the Indecon report was only commissioned around Easter this year. Indecon may have done its surveys, and that is great, but we do not need to hear from Indecon to decide whether there is a public policy basis on which we should bring forward this legislation. That is something about which the Court of Justice of the European Union, CJEU, has been quite clear in the Stoss case. It has stated we do not need research to demonstrate X, Y and Z in public policy is necessary. In fact, the European courts have been very clear that gambling, in particular, is an area in which member states must be given wide purvey to reflect their own social mores or social objectives in how they regulate it.
This is why I also have a difficulty with this idea we are now talking about, namely, whether the Bill is compliant with EU law. It goes without saying legislation passed by these Houses must be in compliance with European law. I presume the Minister of State is referring to elements of the Treaty on the Functioning of the European Union, specifically Articles 49 and 56. I do not believe this legislation is abhorrent to those articles. In fact, if we look at the case of Digibet and Albers, for example, the CJEU has referenced the overriding reasons of public policy that is in the public interest, which can satisfy the justification for a state to bring in legislation like this. In that case, the court referenced consumer protection, combating fraud and crime, and preventing incitement to squander money on gambling. That is what that case was about. The CJEU has been very clear it is supportive of the rights of individual member states to bring forward legislation in exactly this area.
I do not accept there is legitimate expectation on the part of any commercial gambling company, that there is a conflict with European law or that we need to wait for an Indecon report. I also do not accept we have to wait for the view of the gambling regulatory authority for two reasons. First, we do not know when that authority will be up and running. That legislation has not even been published. I am a member of the Joint Committee on Justice that undertook the pre-legislative scrutiny of that Bill, which is a justice Bill quite separate from the regulation already in place regarding the national lottery. That Bill, or at least what we know of it, did not reference bringing the national lottery under the auspices of a gambling regulator.
It has always been the case in this country that the national lottery has been separately and distinctly regulated because it is a separate and distinct offering compared with what bookmakers and commercial gambling operations offer. They are unregulated. I welcome their regulation and look forward to that legislation but they are a separate issue from the national lottery, which is why it comes under the auspices of the Department of Public Expenditure and Reform and gambling comes under the auspices of the Department of Justice. They are not even managed by the same Departments. That is an absolute red herring when it comes to any opposition to this Bill.
I am most disappointed by the fact that I understood there was a previous commitment from the Government to bring forward amendments to fix the problems it saw with this Bill. I concede there are problems but they are fixable and could have been fixed simply by amendment. Despite communications from Senators to the Department warning it that this stage was coming, and despite the fact we have already had a day on which we had 40 minutes' discussion of this Bill on Committee Stage during which that was then the issue, no amendment has been brought forward. I do not understand the sudden cooling from the Department of Public Expenditure and Reform, when we have a stated ambition on behalf of its Minister to bring this kind of legislation through. I do not understand why we are not progressing this today.
As far as I am concerned, we will finish Committee Stage today, whether the Minister of State has reservations or not, because that is the job of this House and that is what will happen.
I will follow up on what the Senator said. I see it from his side. I believe it is good legislation and it is, in effect, a slap in the face from members of his party in the Government. That is the reality of it. I do not want to rub salt into the wound. Senator Ward has put a lot of work into this Bill. We have three Fine Gael Senators who brought this legislation to the House and who did a lot of work on it. I also thought there would be some amendments. I am somewhat surprised there are not. Words indicating this legislation is not robust enough were used; this is pretty cutting stuff to say to a member of a Government party. This might all have been ironed out yesterday or the day before. The tone of the response is harsh. It is a rejection by the Minster of State of a Bill brought forward by members of a Government party on his side of the House. Clearly, all communications have broken down. It all seems to be a bit of a surprise to these Senators and I share their disappointment. Last time we discussed this, I went away thinking there would be some amendments. That is what it is. Let us call it what it is; a slap in the face by the Government to members of a party that is in the Government. I would be grossly insulted if I had brought such legislation to this House.
Senator Carrigy referred to the loss of money by agents. It is a notional loss of income because people are gambling-----
It is loss of income.
It is loss of income the Senator expects would return to the lottery, were the bookies banned from taking bets on that. I accept that is the problem the legislation is trying to solve. Senator Boyhan mentioned that a lot of work has been done and there is a lot more work to do.
Much work has been done, not just by the Senators but also within my Department. Commissioning that independent and external report is a good thing to do. Considering that report is good. Getting clear legal advice about whether this law would be challenged and whether that challenge might be successful is important and doing the pre-legislative scrutiny on the gambling Bill in the Department of Justice is also important work. We need to make sure it will stand up and that we have all the information we need to make a good law. We clearly share the same objectives. We want to make sure there is sufficient money for good causes.
We have been discussing the emphasis on making sure the money for good causes is retained and maximised. Senator Crowe suggested we should think about the prizes and the value for money for the consumer. We are trying with the Indecon report to make sure we follow best practice compared to other countries, to do a good analysis of what works in other jurisdictions and to make sure the money being spent on good causes is spent in a way that is transparent and obvious to the public, so that if we fund a project and people get a great benefit from it, they can make the connection between buying a ticket and something in their community getting funding. The EU does that well but perhaps that could be done better in respect of lottery funding. I look forward to seeing what is in that report. I know it has been drafted but I have not seen the draft yet. I think it is very close to its conclusion. It would be wrong to make legislation about this without having the report.
The comparison was made to the UK and other jurisdictions that have banned betting on lottery numbers. The problem is if the ban is brought in at the time the lottery is brought in or at the start, you have not allowed a business to build up and, as was said, a legitimate expectation for that business to exist. We are looking at Articles 49 and 56 of the Treaty on the Functioning of the EU in this regard. In Ireland for roughly 30 years, bookies have been running this business. The legal advice we have from the Attorney General's office is that if we take that business away solely on the grounds that we would like to take their money and spend it on good causes, that could be challenged and it may not stand up. We need to think about this.
Senator Boyhan referred to the harsh tone of the comments. That was never my intention and I apologise if my tone came across as harsh. In terms of working together on this, I am always willing to meet any Senator who contacts me. Any Senator who wants to come around my office and discuss legislation or ideas they have, I am willing and my door is open to anybody, whether a Government or Opposition Senator. That is always the way because I do not have all the good ideas. Most good things I have done have been somebody else's idea, I have to admit. That comes from being open and listening to people.
Senator Ward made the point that the regulation of the national lottery is completely separate from private gambling regulation and they are completely different animals. I am not sure I accept that. As I see it, the consumers are the same people. They are the public whether they walk into the bookies or buy a lottery ticket. They are buying it in different venues but they are the same people spending the same disposable income and, at the end of the day, they are gambling. They are betting in different ways. The only difference is the bookie is a profit-making organisation and the lottery is sending most of its money to good causes.
Question put and agreed to.
Sections 2 and 3 agreed to.
Title agreed to.
Bill reported without amendment.
When is it proposed to take the next Stage?
Dé Máirt seo chugainn.
Is that agreed? Agreed.
Report Stage ordered for Tuesday, 19 July 2022.
For the avoidance of doubt, it is always a pleasure to see my Dún Laoghaire colleague here. I am not insulted by him. He has carried the yoke on this Bill from the get-go and I appreciate his bona fides. I do not agree with him and that is okay because we have disagreed in the past but have agreed and continue to agree on a lot. I thank him for coming here and dealing with the issues. I take no umbrage from anything he said.
I am glad to hear that. The Senator and the Minister of State are neighbours out there. I thank the Minister of State for being here and colleagues for their positivity and co-operation. Senator Carrigy wants the last word on totally parochial considerations.
In response to Senator Crowe, it is important to mention that the private operator purchased the licence for €400 million-----
We cannot re-debate the Bill.
It is gone into the Exchequer for the building of the national children's hospital. That is important to note and gets lost in the discussion.
That is a worthy and great cause. Go raibh maith agaibh as ucht bhur gcomhoibre. The House stands adjourned until 10. a.m. tomorrow morning in accordance with the order of the Seanad of Thursday, 7 July 2022. Hopefully temperatures will be lower in every sense of the word tomorrow.
Cuireadh an Seanad ar athló ar 8.36 p.m. go dtí 10 a.m., Dé Céadaoin, an 13 Iúil 2022.
The Seanad adjourned at 8.36 p.m. until 10 a.m. on Wednesday, 13 July 2022.