Dáil Éireann Debate, Tuesday - 20 November 2012
468. Deputy Gerald Nash asked the Minister for Justice and Equality if he will review plans to wind down the charitable lotteries scheme; his views on whether he will oblige the successful applicant for the State's lottery licence to provide resources to organisations currently supported under the charitable lotteries scheme by way of a clause in, or condition under the licence regime; and if he will make a statement on the matter. [50865/12]
View answerThe amount of funding available under the Charitable Lotteries Scheme in 2012 is €6 million. This total is unchanged from 2011. Applications from nineteen eligible organisations, that is, charities that operate lotteries that were established before 1997, are currently being processed by the Department of Justice and Equality and payments will be made later this year. The total funding available under the Scheme will begin to reduce in 2013 and will be gradually decreased over a period of three years after which the scheme will be discontinued. Recipient organisations were advised of this in early October, in effect giving them more than 12 months notice of this change. The decision to wind down this Scheme has been taken in the context of the requirement for all Government Departments to meet exacting savings targets in the years ahead.
Funding disbursed under the Charitable Lotteries Scheme is drawn from both the National Lottery surplus and exchequer funding. The Scheme was set up in 1997 to supplement the incomes of charitable organisations that were operating lotteries in competition with the National Lottery. Approximately €114 million has been disbursed under the Scheme since its inception. The amount each organisation receives is determined in proportion to its gross annual sales of relevant lottery products. The criteria for the Scheme do not take account of either the profitability of the lottery or the proportion of the revenue it generates that reaches the charitable cause in whose name the products are sold. This means that the scheme has not provided any incentive for charities to operate lotteries with a low cost base or to ensure that a high proportion of the revenue generated goes directly to the cause with which the ticket is identified. Such a Scheme can no longer be justified in the current circumstances.
The gradual phasing out of the Scheme will yield savings of €11 million over the three year period 2013-2015, with a further saving of €6 million each year after 2015 when no further payments will be made. The level of assistance is being reduced gradually in order to minimise the impact on the organisations affected and to afford them an opportunity to consider appropriate action they could take to generate greater net profit from their fundraising activities and to make such changes as they consider beneficial.
In this context, I am also considering an increase to the current limits on private lottery prizes under the Gaming and Lotteries Act of 1956. I have asked organisations in receipt of funding under the Charitable Lotteries Scheme to consider this issue and have invited them to make a submission to my Department. I look forward to receiving their views in the near future.
The matter of the State's lottery licence is the responsibility of my colleague, the Minister for Public Expenditure and Reform.
