I welcome the Minister for Public Expenditure and Reform, Deputy Howlin, to the House.
National Lottery: Motion
I move:
That Seanad Éireann:
considers the National Lottery one of the most valuable resources owned and funded by the Irish people;
understands that the National Lottery Licence which is held by An Post National Lottery Company is due to expire in 2013;
notes the legislative intent of the National Lottery Bill 2012 and notes the decision of the Government to conduct a competitive process for award of the sale of a licence to operate the National Lottery over a 20 year period;
welcomes the proposal to appoint a Regulator of the National Lottery.
Calls on the Minister for Public Expenditure and Reform to:
— ensure that the ownership of the National Lottery Licence remains entirely within the State;
— reconsider the stated aim of awarding the license to the highest bidder in exchange for a capital sum;
— conduct a competitive process to award the licence to the operator adjudged best equipped to run the Irish Lottery, for a fixed fee, wholly and entirely for the good and the material benefit of the Irish people;
— reconsider the sale of National Lottery tickets via the development of interactive channels; and
— build the Children’s Hospital through a hypothecated lottery i.e. a dedicated weekly draw for a specified and intended purpose.
I welcome the Minister to the House.
As we all will be aware, the national lottery has been a remarkable success. In 2011, €761 million was spent on lottery tickets and €232 million on good causes. However, this afternoon I feel that I am like the guy with one bullet who is being approached by 100 Apache and 100 Arapaho coming across a mountain in front of me because I have a distinct belief about the sale of the lottery licence. I am constantly fighting on the corridors and hearing, "You are not on about that again," from senior members in both parties in government.
I have great respect for the Minister. He is a most worthy opponent. I have respect for his office and his ability, but I do not respect his decision to sell the national lottery licence. I want every Senator and Deputy, or the ones who are here, to hear my arguments and make up their minds on the facts, not on their tribes. I also intend to ask the public in the next few weeks to follow my arguments about the appalling sale on a blog, dontlootthelottery.ie.
First, let me get rid of some untruths about the sale of the lottery licence. I call them untruths with great respect, but they are untruths. The Minister must open up the lottery licence to competitive tendering for renewal. The Minister told us he does not have discretion regarding whether to hold a competition for the next lottery licence, and he is correct. The present lottery licence, held by An Post National Lottery Company, is due to expire next year and it is up for renewal. This is true. Nothing could be truer. The Minister is obliged to renew the licence. The time is up. The time has come. The Minister must act under EU law and directives.
What is different this time? What is my problem? The difference is that the Minister is being a little disingenuous with this information. What is different is that the Minister has decided to sell the licence while he is at it. Nobody asked him to sell it. Nobody told him to sell it. His Department decided to sell it all on its own. Renewal does not mean sale. Renewal is not sale; sale is sale. Would Deputies and Senators stop arguing it as it is completely untrue? I will interrupt anyone who refers to a sale as though he or she was talking about renewal during the debate.
The Minister is hiding the sale behind renewal and confusing the issues. It is very clever. The Minister is using the renewal process to push through a sale of the lottery licence to the highest bidder for €500 million up-front to build the national children's hospital. If the Minister was not selling and looking for this €500 million up-front, An Post would be reinstated because its running of the national lottery has been unmatched. However, the Minister is selling. An Post does not have €500 million - neither do I and neither does anybody else in Ireland - and the Minister must sell elsewhere. Let us get ready because the swagmen, the loot men and booty men are on the way.
"So what?", they argue, stating that the Minister has assured them all that good causes funded by the lottery will be ring-fenced, held unmoved, rigid forever, despite the new sale. Every Deputy in the country has asked whether the good causes, the retailers and the 108 administrative jobs will be protected. All will be protected, they are told, but this is not the question. The question is why are we selling the lottery licence for €500 million for 20 years. I do not know anybody who gives one €500 million and walks away. What do the swagmen get for €500 million?
I believe they are swagmen because they are private sector firms and consortia, gaming and gambling organisations, global players such as Tatts Group, GTECH corporation which is a subsidiary of Lottomatica, and Camelot which is owned by the Ontario Teachers' Pension Plan. These only make big money bids for assets if they think they can make bigger money down the line.
If I rang up the Minister and said that I am Camelot, Tatts or GTECH, I have €500 million and I am interested in investing in the lottery licence because I am cash rich because of pension funds elsewhere, I could make a bid, but my big question is what is in it for me. The Minister would tell me there is a significant payback. "What is it?", I would ask, since the lottery, as run by An Post, seems very tied up - 54% on prizes, 31.5% on good causes and 14% on administration, agents and commission - and there is very little left over. The payback is that I would open interactive sales and gambling online. The Minister may impose certain legal restrictions, boundaries and taxes, but he and I know that it is the greatest cash cow. Even with restrictions, there is a significant profit over 20 years. My response would be, "That sounds like a good deal, I will be back to you." Why else would the swagmen give us €500 million? What they will get is the opening up of online gambling. I need not tell anybody here the danger of that. They need only take a look at the "Prime Time" report by Mr. Joe O'Shea two weeks ago on this very topic.
At present in Ireland gambling online is available to a very limited extent and the National Lottery Act 1986 restricts online players to Republic of Ireland residents. However, we, through legislative changes, will open this up. We will pay €500 million for it and the swagmen, who have already met the Minister, will get the money. No amount of emotional pleading on my part will possibly stop that.
I met nobody. It is important that the Senator understand that.
It is the selling, not the renewal, that is the problem.
I am surprised many Deputies and Senators have not seen this.
I could try to get the money to build the children's hospital through a dedicated draw, perhaps on a Wednesday night, over five or six years. If we had done this for road construction we probably would not have paid a €10 billion overcharge for work not done. The Minister speaks about an updated model with €500 million from the highest bidder but what is updated about this? The Minister speaks about New South Wales where this was done but we are not comparable to New South Wales. We are more comparable to Auckland. The Minister stated it would be remiss of Ireland not to take a similar approach to New South Wales but these are bad comparisons. It is not good governance to copy. Alleviating physical pressure by using the lottery and the opening of online gambling, which is primarily played by the poor, disadvantaged and less well-off is, once again, the greatest transfer of wealth from the working man to the private money swagmen. Gaming consortia are coming to bail out the Government and take away the huge profit.
The facts remain that if somebody gives one €500 million and one gives the person a licence for 20 years and online gambling is opened up to pay the interest on the loan, it does not make it right. The only reason the Minister is repealing the National Lottery Act 1986 and changing the legislation is to do just this and open up online gambling. There is no other reason to do it. The Minister needs to stop telling us it is about something else.
It will be a mess and it is wrong because it was an idea of its time, when the cost of finance and yield on Government bonds was between 8% and 10% but now it is at 3%. The time for it has passed. If it is sold for less than €500 million it will be disastrous for the people's money. I wish to inform the Senators of an important fact - it is not included in the target to raise €3 billion through the sale of State assets set by the EU and the IMF. The troika sales target includes only hard assets such as the ESB and Bord Gáis.
The Minister states he is concerned with all stakeholders. I am a stakeholder. I cannot hold back online gambling and I would be a fool to try, but if it is going to be done let us do it ourselves and ask the Irish people about a dedicated draw to build the children's hospital. They will build it for the Minister without hesitation. The Minister does not have to sell our lottery licence. It is the people's money from the charity of their pockets. I do not believe it is the Minister's to sell. It does not belong to him to sell.
Senator O'Donnell asked Fianna Fáil to second the motion and I am delighted to do so. She will start a national debate on this which is very welcome because people are not fully up to speed with what is happening. Her motion is moderate and in tune with the public. Fianna Fáil has opposed the establishment of a regulator but this is neither here nor there with regard to the motion. We are more than happy to second it.
The motion calls on the Minister to ensure ownership of the licence remains entirely in the State and people would expect this of their national lottery. It is generally the case with lotteries throughout the world, particularly in the United States, that they stay in their own areas and are seen as a badge of nationality. They are national organisations. Spain and Italy have lotteries. Lotteries came together to form a European lottery. In the United States, each state has its own lottery. It is seen as a geographical or national item and this is an important point to remember.
A huge issue arises with regard to the children's hospital towards which there is a huge amount of goodwill. I have no doubt of the huge political goodwill in government and opposition towards it. The legislation the Minister proposed in the other House does not contain a mechanism to ring-fence the money; therefore, by calling for a dedicated weekly draw for the children's hospital, Senator O'Donnell raises an important issue and highlights a major flaw in the Government's proposal. From a legal point of view there is no commitment to give any money from the sale of the lottery licence towards a children's hospital and this will be a point of huge concern for people.
The national lottery was established by a Fine Gael and Labour Party Government in the 1980s, and one of its flaws is that money was never ring-fenced for good causes. Money from the national lottery went straight into the national accounts and this has been true under all Governments involving Fianna Fáil, Fine Gael and the Labour Party over many years. I am led to believe this flaw was pointed out in the 1980s. I complained when I failed to see money going to good-----
Fianna Fáil had 14 years to amend it if Senator Byrne felt this way.
Blaming relatively young Fianna Fáil members for what happened in 1997 must stop. I was in college then. The Minister was a Minister back when I joined Fianna Fáil.
The Senator was a member of the previous Government.
That is how long ago this was. I am not answerable for it.
Senator Thomas Byrne to continue, without interruption.
I can say I often raised the question as to why money was never ring-fenced. The money one pays for a national lottery ticket goes from the newsagent through An Post straight to the Exchequer. One then hopes a Minister will spend it on the good causes on which one expects it to be spent, but this is not the practical reality. I am very concerned about the lack of a legal commitment or a dedicated draw, such as that proposed by Senator O'Donnell for the children's hospital in her motion, because we do not have a track record as a nation of dedicating the moneys supposedly reserved for good causes to those good causes. The money goes to the Department of Health and the Department of Transport, Tourism and Sport and is occasionally delivered out. This system, which has continued for almost 30 years through various Governments, is wrong. I tried to change it and I made this point on a regular basis because I was frustrated no money was distributed in certain years for national lottery good causes, or so it seemed.
A dedicated draw, as proposed by Senator O'Donnell for the children's hospital, or a legal obligation on the Government to use money from lottery proceeds towards the children's hospital will be essential. Otherwise people will not have faith in the system if they believe this is simply a political commitment and not a legal one. People need to be able to grab onto something and know for definite where their money is going. This is not in the proposed legislation. The people do not trust political commitments from any party on these matters. We need a law or a measure such as that proposed by Senator O'Donnell.
There will be a good debate about the National Lottery and I hope Senator O'Donnell's campaign takes off. Sometimes debates in these Houses do not get reported very widely. Legislation may be guillotined or passed in the midst of much other legislation, and gets ignored by the wider public. This debate will be useful to get the public involved in the debate in order that they know what is proposed for their lottery and can respond and changes can be made if this is what they desire. I compliment the Senatoe on the motion which we will certainly support.
I move amendment No. 1:
To delete all words after "Seanad Éireann", and substitute the following:
"welcomes the decision of the Government to hold a competition for the next licence to operate the National Lottery, in accordance with EU legal requirements;
notes the publication of the National Lottery Bill in December 2012 which, once passed by Dáil Éireann, will come before the Seanad;
recognises the major achievements to date of the National Lottery and the widespread support of the Irish public for the Lottery;
recognises the need for the State in the current economic situation to pursue opportunities to generate additional revenues that do not impact on taxpayers;
welcomes the fact that the next licence will involve the ongoing provision of a significant level of funding for good causes each year; and
welcomes the fact that the new licence will also involve an upfront payment to the State which will enable the construction of the new National Paediatric Hospital to progress without further delay.".
The Bill has passed Second Stage in the Dáil and to the best of my knowledge Fianna Fáil did not oppose the principles of the Bill but had questions on regulation and the level of and commitment to the upfront payment to the children's hospital. It certainly did not oppose the Bill or the proposal.
We all agree the national lottery has served us well since 1987. However, the licence is due for renewal - I use this word because that is what is happening.
The Minister is required under EU competition law to advertise and seek expressions of interest. The measure to seek an upfront payment is welcome. I am sure that the Minister, when he has the opportunity, will state when a new paediatric hospital will be built.
I note Senator O'Donnell's and the other Independent Senators' proposal to establish a dedicated weekly lottery or draw. I would question that proposal because it could take a long time to establish. Do we have the necessary resources? We need the money now for the children's hospital.
The licence is due to be granted and not necessarily to the highest bidder as certain conditions are attached to it. That may not attract the number of investors hoped for. When the licence was offered for renewal in 1999, An Post ended up the only body to win the licence because two interested parties withdrew. An Post will have the option to bid for the current licence and I wish it success. The preferred bidder will be welcome. The national lottery contributes to good causes and the money has been very beneficial to communities. We can all quote the advantages of it and the good causes that have received necessary funding which would not have existed only for the lottery. To data the national lottery has had the support of the people. It has operated well. There has never been any question about the operation of the fund by An Post, the draw and its system of collecting moneys. We can all say that it has done very well, but now it is being opened up for renewal.
I noticed the figure of €500 million was mentioned but I could not find it. I do not think the figure is correct. I do not think that the Minister or the Government has ever recommended or stated an expected figure. The licence is open to the market and we will see what we get. I congratulate the Minister and the Government for their innovative proposal in terms of providing funding for a children's hospital. The proposal means that money will be collected upfront. The licence will not be given away. It is an opportunity for somebody to operate the licence for 20 years. That licence will still be held by the State. Perhaps a consortium, individual or an organisation such as An Post will operate it on behalf of the people whom I hope will continue to support it. Contributions have decreased in recent years which reflects the economic climate.
In 1987, when the national lottery was established, it was at a time of economic difficulties. It was an opportunity to provide funding for good causes and necessary developments across the country. The scheme has worked well and I hope that it will continue to do so. I wish the Minister well with the development and his proposals.
I welcome the Minister to the House and congratulate Senator O'Donnell on her courage and innovation in tabling the motion. It is timely. I opposed the lottery Bill. I opposed the selling of our assets. I recognise that there has been a consistent dumbing down of this society. Just the other weekend I watched television and for one hour, every single station that was accessible in my home, carried a gaming show of one kind or another. That is the type of society in which we live. I deplore it but it is the reality. If the State can do good with this measure then so be it as far as I am concerned. I am very concerned that we are selling off the asset. I read a speech by Deputy Kenny in the other House and he made a distinction between selling the lottery and selling the licence. In my opinion that was a specious, Jesuitical argument. Selling the licence is effectively selling the lottery. If it is not then it is renting the lottery. One could adapt James Joyce and say that they there were people around the place who would not only sell their country for three halfpence but they would get down on their knees and thank the Almighty Christ they had a country to sell. We can just substitute "sell" with the word "rent". There are people who would be delighted to say that they had rented the country. In fact if one continues the metaphor of renting, we are renting out the goose and buying back the eggs. That is a considerable mistake.
With regard to Senator O'Donnell's proposal, she first articulated what I have always thought was a prime article of faith for a socialist, to control and keep nationally the productive elements in terms of the financial strength of the country. I thought that was a sine qua non, that we wanted to keep our wealth and use it in the interests of the people. I support that aim completely. It is stated in her motion: "ensure that the ownership of the National Lottery Licence remains entirely within the State ... conduct a competitive process" but ensuring that the profits are "wholly and entirely" used for the welfare and "benefit of the Irish people." Who can argue with that? I certainly cannot and I doubt if the Minister will be able to. Then there is provision to "build the Children’s Hospital". That aim has been built into Senator O'Donnell's motion. Let us not have any of this business whenever we speak about this matter, and to which I have referred previously, of "Don't hit me with the baby in my arms." The baby is still in the arms of Senator O'Donnell and she will fight to protect it. I do not accept that the children's hospital will in any way be affected by accepting her motion.
I would like to ask Senator Clune a question. She is a very decent Member of the House. What did she mean by or the Minister can spell out what is meant by "ongoing provision of a significant level of funding for good causes"? What is a significant level? I would like to know.
Within the past week I watched "Nationwide" and a very moving part of the programme dealt with a facility for people in Kildare affected by spina bifida. There was a woman whose life had been absolutely revived by being involved in a sports recreational hall that had been provided by lottery funds. A young man was interviewed and he said that it had been a positive thing for him to end up in a wheelchair because he never would have competed at international level in sports. I thought that was an astonishing comment. At least the lottery gives hope, optimism and some degree of future to these people, yet we are talking of giving it away to the international gambling combines.
Let us look at them. One of them was Camelot which was said in an article recently to be eyeing up the licence. Of course it is. Why is it eyeing it up? It is eyeing it up because it can make more profit than we can or at least it thinks so. I want the profit to stay here. I do not see why, since this is a republic, we want to give it away to the English or, as they have now been identified, a teachers' pension fund in Ontario. What is the point of doing that? That is what we did with Eircom. We gave Eircom away and it became a pension fund in Australia. A well named Australian company is interested in the lottery and is called Tatts. If not Tatts, how about the Italian gaming giant Lottomatica which hid under the sobriquet of GTECH? I feel it would be a very funny exercise if we were to hand away our national gambling institution to the Italians because their reputation in that area has not been entirely without odour.
The Minister has indicated - he will correct me if I am wrong as I would not want to do him an injustice - that there will be €200 million set aside for the national children's hospital. That is the kind of figure that is being talked of. Various estimations of the value of the lottery sale have been tossed around and range between €400 million and €600 million. An independent assessor who knows the market has said that it is about €100 million. We may get €100 million but we spend over €230 million every year so the sums do not add up, just like Coillte. The sale of Coillte was a brainwave until Professor Peter Bacon pointed out that it was financial madness that would expose us to €1.3 billion of downside consequences. Why are we doing this? It worries me very much. It seems to me to be all of a piece of this kind of daft thing. We are selling for €100 million, which is what we will probably get, something that brings in €230 million every year for the State.
The areas in which the lottery funding is disbursed is on sport and recreating, health and welfare, arts and culture, Irish language, all activities with which we agree. I should state a vested interest in the lottery, I am one of a small number of people who still have my little plastic wallet and have been doing the lotto religiously since it started and I would like the Minister to know that I am very grateful - I won the lotto on last Wednesday and got €5 and two scratch tickets and one of the scratch tickets produced another scratch ticket that had two of everything and produced nothing.
Congratulations.
The people have a vested interest in the lotto, 62% to 63% of people regularly engage in the lotto that is the reason I believe it should remain in Ireland. We are fifth per capita in terms of lottery sales in Europe. We are only eight in terms of the distribution to good causes. Instead of trying to sell off the lottery, perhaps we could increase the percentage that goes to good causes.
I read the Bill and a Minister can become the regulator. With due deference to those present, I was not impressed by the distribution of funds recently decided by Ministers, which appeared to be far too blatantly partisan and for electoral purposes. I think that was wrong and I deplore it. I said it when it happened during the Fianna Fáil Government and I say it again with Fine Gael in government. It is not Government's money, it is never Fine Gael's or the Labour Party's turn to do this, that or the other, it is always the welfare of the people that is at stake and it is always the people's money. We should be accountable in this House for that money and I salute Senator O'Donnell for holding the Government to account on this very important matter.
I am very glad to have the opportunity yet again to come to the Seanad to discuss this issue. I have had many discussions with Senator O'Donnell on this matter, including in my office. I thought we had a meeting of minds. I would not characterise her as she has characterised me as an opponent or an adversary on this matter. I respect her views. This House is a Chamber to express different views and debate them. Because we do not agree, it does not mean we are adversaries or that we need to be disparaging of one another. This is a place where ideas are challenged.
Therefore, it is very important to retain it. I am glad the Minister agrees.
This issue was previously debated in the Seanad in May last year when I had the opportunity to discuss the matter and to hear the views of Senators, and have had heard the views of many individual Senators since. As member are aware, the National Lottery Bill was published before Christmas and has passed Second Stage. The Committee Stage of the Bill is currently before the Dáil. I look forward to debating the detail of the Bill with Senators when it comes before the Seanad.
The National Lottery Bill 2012 is intended to replace the National Lottery Act 1986. Under the Act, the Minister for Public Expenditure and Reform may issue a licence to a person or company to hold the national lottery on behalf of the Minister on behalf of the State. I am very conscious that I accountable to the Houses of the Oireachtas and to my own electorate. The new legislation will also provide for the operation of the national lottery under a licence on behalf of the Minister. Since its establishment, the national lottery has been operated under a number of consecutive licences by An Post National Lottery Company.
I would like once again to pay tribute to the very substantial achievements of the national lottery since its inception in the mid 1980s. During the past quarter of a century, the National Lottery Company has come to be regarded as a very innovative and successful national lottery. Since 1987, it has raised about €4 billion for good causes right across the country, an astonishing sum.
The decision to establish a national lottery was taken at a time of economic difficulty for Ireland in the 1980s. We are again seeking to address very serious financial and economic challenges. Notwithstanding the successes of Government in renegotiating the repayment schedule for the promissory note last week, we still face very significant economic challenges. There are very real demands on us as a society, not least from the hospital sector. In view of these challenges, the Government decided in November 2011 to explore the opportunities presented by the expiry of the current lottery licence. Following an examination of the various options by my Department, the Government, elected by the people, agreed in April 2012 that the following arrangements will apply to the next national lottery licence:
- There will be a competitive process for the award of the licence which will be for a period of 20 years;
- The terms of the next licence will include an upfront payment to the State - the intention is that part of this upfront payment will be used to help fund the building of the new National Children's Hospital - I will go into some detail on how that is to be ringfenced if Senators wish;
- The next licence will involve the ongoing provision of a significant level of funding for good causes . I have indicated a quantum analogous to what has been generated to date. There will be no diminution of that.
As I have mentioned, the National Lottery Bill was published in December 2012.
From 33%
It has varied year on year. The most recent figures I have looked at were for 2011 and at that stage it was 30.05% in that year. The Bill has a number of purposes, in particular: to continue to provide a legislative framework for the operation of a national lottery; to continue to safeguard the integrity of the national lottery, for example through the continued safeguarding of cash generated by lottery sales; and to provide for a new national lottery regulator, a new innovation to deal with the point which Senators raised, the issue of unregulated gambling. We will have a lotto regulator - I have had discussions with the Minister for Justice and Equality, Deputy Shatter - which in time will become the gambling regulator, in order that we will have control in so far as we can over gambling. So many online gambling operations are based in Singapore, Hong Kong or other place as that is the nature of new technology. Most of those who contributed in the Lower House welcomed that innovation. The office of the regulator shall be funded by the national lottery operator and will be independent of the Minister.
Let me set out certain principles reg
+arding the regulation of the national lottery, for example, the circumstances in which a licence may be amended or revoked. If the body who is awarded the licence does not meet the conditions and the standards we expect, we can revoke the licence. The standards will limit the quantum of money we will get for it because we want to have a very tight ship. I note that the original motion, before the amendment was tabled welcomed the appointment of a national lottery regulator. The National Lottery Bill 2012 passed Second Stage in the Dáil last week and the Committee Stage debate is awaited.
The competition for the next licence will be undertaken by my Department. I have approved and published on my Department's website a protocol which sets out the procedures to be followed regarding contact with potential bidders.
That is the reason I interrupted Senator O'Donnell. I have met no potential bidders.
I accept that.
I have instructed all senior officials in my Department on the clear channel, in order that all issues relating to the awarding of this contract will be handled with absolute probity. There should be no doubt whatsoever about it. It is envisaged that the competition will commence during the second quarter of 2013. My Department is being assisted in the financial and commercial aspects of the process by Davy Corporate Finance.
Let me repeat, I do not have any discretion regarding whether to hold a competition for the next national lottery licence. This is a point which I would like to emphasise strongly. A number of commentators appear to be under the impression that I as Minister have the option to award the next licence to whomsoever I wish. This is simply not the case.
The motion tabled before the House "calls on the Minister for Public Expenditure and Reform to ... ensure that the ownership of the National Lottery Licence remains entirely within the State". Under European Union law, it is open to any European to bid for it and, consequently, it is not only unlawful but would be unethical for me to fix the result, which, were I to confine it, is what would be implied. All those colourful people about whom the Senator spoke, good people from either the United Kingdom or Italy, are entitled to bid, as we are entitled under the Single Market to bid for licence arrangements. This is encompassed under the Single Market provisions and the Government must be open to deal with it in that context. To be blunt, when going through a process to comply with European competition law, it is quite astonishing for a House of Parliament to suggest one should fix the result.
No one suggested that.
How am I to ensure it remains entirely within the State unless I determine the outcome of the bid, which I am not entitled to do?
No, there is a distinction between-----
The Minister to continue, without interruption.
Bidders from other jurisdictions, as well as Ireland, may well bid for the licence. I do not know yet but I hope they do. Therefore, it follows that the licence cannot deliberately be kept under Irish ownership. I have explained this point repeatedly. The State may set the terms for both the competition and the licence itself - these terms concern the duration of the licence and the final arrangements underpinning it - but the Government has no legal authority to determine that only an Irish bidder will succeed. Were I to make such provision, I would open the State to being sued instantly and the entire licence would be nullified by the European Court of Justice.
This will not be the first time that a competition has been held for this licence. Some Senators will recall that a competition for the current licence was held between 1999 and 2001, which attracted interest from three interested parties, not all of which were from the State. Following the withdrawal of the other two parties during the course of the competition, the licence was awarded finally to the incumbent, namely, An Post National Lottery Company. This might well be the case again. I do not know. It might be a successful bidder, either by itself or in tandem with others. As I have stated, I am not involved in dialogue with any individual or potential bidder.
The Government is using the opportunity presented by the competition for a new licence to generate an up-front payment. This was an innovation when I was trying to put together a stimulus package, and I refer to another point made that somehow this is not part of the EU-IMF targets. It deliberately is not, as I kept it separate because under the original EU-IMF target negotiated by the previous Government, all the proceeds of the sale of State assets had to be used to retire debt. Through repeated negotiation over a year and a half, the troika has agreed the Government may use half of those proceeds to invest in job creation in the State, with the balance being used as a backstop to generate even more money, but ultimately to retire debt. This concerns half of the money the Government will generate from the sale of State assets. However, I have always kept this sale separate because I wish to use it in its entirety for good purposes, the predominant part of which will be to build the new children's hospital. I have not included that aim in the Bill because there is no necessity to so do. One does not include such a provision into a 20-year structure for the Bill. However, I can give Members my word - which I hope is good enough - that this is my intention and that of the Government in respect of this matter.
That is the problem.
Moreover, that word will be tested very quickly because, as Members will be aware on foot of the announcement made yesterday by the Minister for Health, the Government is now advancing this development and a project team has been appointed. I have no other money available for this purpose. The Government will build the children's hospital in the shortest possible time and the dedicated money for the project will come from this source.
I do not need to remind Senators of the difficult economic circumstances in the country. Given the present budgetary position, the Government must be innovative and creative when opportunities arise to generate money like this. It must establish how, in a country that is starved of capital, it can get at money to do things that are really important right now. It must so do both to generate the hundreds of jobs that will flow from this project and to have a flagship national children's hospital that it is hoped will serve both the State and the entire island of Ireland. It is to be hoped that even in the face of adversity and economic difficulty, it will be something of which this generation will be proud. Failure to think creatively about how the Government might find additional resources has a cost. That cost will be reflected in an inability to provide vital elements of social infrastructure for the people. Therefore, as I indicated, the Government has decided to take advantage of the opportunity presented by the timing of the lapse of the current licence to dedicate it in a different way to fund the children's hospital.
Recent years have seen a number of states and regions, to which reference has been made, make new arrangements for their lotteries. A number of jurisdictions are examining how best their state or regional lotteries can help to alleviate financial pressures. It would be remiss of Ireland not to take a similar approach. The Government is committed to doing the best deal for the State that can be done and, as I have noted, there are three key elements, namely, an up-front payment, the maintenance of confidence in the ongoing revenue stream for good causes, in which regard I can give Senator Norris my assurances, and continued public support for the role, ethos and integrity of the lottery. All these elements must be reflected in this process.
The original motion tabled this evening called for a reconsideration of the decision to allow for the sale of national lottery tickets via interactive channels. I am aware that a number of Senators rightfully have concerns with regard to this issue. Since its launch in 1987, the national lottery has been dynamic and it is essential that it continues to evolve in line with changed consumer patterns. Consumers now expect to be able to conduct their business online and the online element of the national lottery must be developed further. Incidentally, it is already in existence, as the lottery already has an online element. I note that when buying an airline ticket nowadays, I no longer go to my local travel agent but go online as a matter of course, and unless one wishes to impose a time limit whereby the national lottery will simply filter out over a timeline to the future, one must move towards the platforms people are using. However, this must be done in a regulated fashion, which is the reason I have devised and successfully recommended to the Government the establishment of a regulator to ensure it is done in a prudent way, and this should migrate to other channels. If this is not done, people still will gamble online but the benefits to the State in respect of good causes will be lost and a much less regulated environment will prevail than that being proposed by the Government.
The national lottery has a very strong record in respect of player protection. It will be ensured that these standards will continue to apply throughout the period of the next licence. This will be provided for under the terms of the licence itself and the new national lottery regulator also will have a key role with regard to player protection. Globally, lotteries are doing more business on the Internet. In the context of a 20-year licence, provision has been included in the new Bill providing for the sale of lottery tickets via interactive channels, as it would be a Luddite view not to prepare for the next 20 years. However, I stress that such games, which as I have mentioned already are available online on a pilot basis, will be rolled out in a way that will protect minors and vulnerable adults. In addition, experience in other jurisdictions, such as, for example, the United Kingdom, indicates the sale of lottery tickets on the Internet will be in addition to, rather than instead of, sales in shops and other retail outlets. It is imperative that the lottery is fully aware of the risk of problem gambling, and its approach to the suite of products it produces should reflect this. I will ensure both the licence under which the next licenceholder will operate and the office of the regulator, which will be established under this provision to enforce the licence, will have as a priority an exemplary approach to these issues.
I am particularly heartened to note that the lottery industry globally takes this matter very seriously and a number of proactive procedures are in place to address this problem and are being enhanced by reference to latest research.
A national lottery is in place to benefit the community and not in any way to harm it. I wish to see people continue to play the lottery, and as Senator Norris does, be successful occasionally. I wish him even greater success in the future. A large proportion of the population playing a little is the preferred model and one on which I intend to base the licence. It will be a condition of the licence to comply with strict codes and procedures regarding the area of problem gambling. I will seek to include in the licence particular requirements for the online environment. It is worth noting that online play does allow for a greater level of monitoring and a capacity to intervene to prevent problem patterns of play developing. I have examined international best practice to ensure that is the case.
Central to the success of the lottery over the past quarter of a century has been the provision of lottery funding for good causes. During the debate on the Bill in the Dáil, speakers placed great emphasis on the importance of the many projects, in all counties, from community health to sport, the arts and heritage, which have been helped by national lottery funding. It is intended that the next licence will continue to provide for the ongoing provision of a significant level of funding for good causes.
I note that a number of Senators have concerns about the provision for an up-front payment. I am pleased that we are agreed on the need to raise funds for the building of the new children's hospital. The motion tabled by the Independent group referred to substituting an upfront payment with a hypothecated lottery. I understand that would involve a dedicated weekly draw, which was explained to me by the Senator, to raise funds for the hospital. I have no doubt such a dedicated draw could well be popular and the motivation for such a proposal is well intentioned. However, it is highly likely that such a draw would simply see players switching their usual spend on lottery products to one that would be dedicated to assist funding the hospital and, by definition, the other good causes would suffer. I want the hospital now. I want the money to build it now. I do not know how I could organise it by saying we would get a drip-feed of money on a weekly basis in the next 20 years. The cost of borrowing on that basis would be enormous. I need the money now. The country needs the hospital now. The way we have designed it is innovative to get an up-front payment from the next licence holder and to be able to dedicate that to such a fine and important cause.
The decision to provide for an up-front payment under the next licence was made after careful consideration. Unlike the alternative proposal which has been put forward, the Government's approach will ensure the raising of funds to allow us to proceed with the building of the hospital. The hospital will be built and will not compromise the flow of funds into the future for good causes.
The national lottery has been an outstanding success story for this country. I note the genuine concerns expressed by a number of Senators. I respect them and the manner in which they have voiced their concerns. However, I stress that the Government is committed to safeguarding the national lottery to make it fit-for-purpose into the future. No institution is caught in a time warp. We must allow for change unless we want the lottery to die. The Government is also committed to availing of the opportunities to ensure that the much needed national children's hospital is built.
The Senator's motion does not take full account of the particular circumstances in which the Government has to make a decision regarding the next lottery licence. I hope I have set that straight. Such decisions involve choices. I am confident that the upcoming competition for the lottery licence is being framed to deliver the best result for the State. Reference was made to €500 million in the Senator's opening comments. She regarded anyone who would pay €500 million as a swagman.
Nobody is suggesting that.
By definition, it is somehow distasteful for someone to come up with such a big wad of money. Senator O'Donnell also said that to get less than €500 million would be a failure. I do not know how much the sale of the national lottery will realise because we have strict conditionalities. If we did not have the regulator, the licence regime, the protection of minors and the protection surrounding online gambling, there is no doubt we would get more money. The Government has made a balanced and innovative choice. I commend the amendment to the House.
Could the Minister not have extended the licence as he did already by 18 months?
I thank the Minister and my colleague, Senator O'Donnell, for tabling the motion, which I fully support. I have listened to the Minister carefully. I can see positive elements on both sides of the argument. The difficulty is that my gut is saying that we should not be doing this. That is why I am supporting the motion.
There is no-----
With respect, I listened to the Minister. First, on the figure of €500 million and the clear statement that there was no basis to it, while waiting to speak I put "national lottery, Brendan Howlin and €500 million" into Google. The Minister must speak to his spokespeople. Numerous newspaper articles come up in response to the search. If we take The Irish Times in August 2012, there is a reference to the lottery licence sale Bill being due next month and to the Minister saying the building of the national children's hospital could be part-funded by a front-load payment secured for the next licence to operate the national lottery. It was stated that the upfront payment to the State could be in the region of €500 million while some €200 million could go to the children's hospital project. The article indicated that the Minister's officials have met and held conference calls with potential bidders for the licence. I went to many sites. I was alarmed that top-10-online-gambling-sites.com is very excited and proposes to bid for the national lottery. That makes me hesitant about what is taking place.
The Minister has said we cannot afford it. It is a difficult subject because it is about the national children's hospital. I passionately agree that we must build the hospital. I have been waiting for it. The announcement by the Minister for Health was to set up a new board for it. The hospital is like the carrot at the end of a stick. We are constantly being told that it will go ahead. I concur with Senator Norris's image of holding the baby. It has become an emotive issue. I want the hospital to go ahead but I do not understand why we cannot have a hypothecated draw. "Hypothecated" is a new word for me.
And for me.
I had to look it up. I wonder why a cost-benefit analysis has not been done. Have we looked to our nearest neighbour in the UK which had a draw for the Olympic Games? From what I read there was not a huge decrease in the other draw. People got behind the London Olympics project and supported it. Whatever one thinks about the Olympic Games, one could certainly motivate people behind the national children's hospital, which for me is part of the reason the motion has been tabled.
The Minister also referred to interactive sales channels and mentioned that such games are already available online. It made me think of my mum saying that just because someone says one should jump over a cliff does not mean that one should do so. I am concerned about the growth of interactive sales channels, as we all are. I am trying to think it through logically. If I was a reputable company that wanted to buy the licence, I would expect a return on it. If I were giving an up-front payment, I would expect a return. Such a return would mean that the money raised would not go to good causes. One does not get a free lunch. As a reputable company why would I give an up-front payment? It would be because I expect to get something. Several companies around the world are now taking steps to regulate interactive sales channels. Perhaps I would expect this country to be a little more lenient on such channels. I do not say that is the Minister's intent but where is the carrot for a company to make an upfront payment? No company would have the same vested interest in us having a national children's hospital as the people of this country. The people of Ireland want such a hospital. I am open to being convinced by the Minister's arguments but I am not. My gut is asking why we are not renewing the licence or staging our payments?
It is not lawful.
We can go for renewal of the licence, we do not have to go for the upfront payment. The Minister has put that argument forward about the up-front payment but we could apply for the renewal of the licence.
We would have to tender for it.
I have no difficulty with that. My difficulty is that by asking for an up-front payment, the bidder expects something in return. Nothing comes for free.
We would get no money otherwise.
We get money from the draws if we have the hypothecated draw Senator O'Donnell has suggested. I would like to see a cost analysis of this. We should talk to the British and also see what payments we need for the national children's hospital. When I was building my house I did not give the builders every cent on the day they said they would build it, even though all the plans and permissions were not yet in place. It was done in stages.
Over how long?
Over several years. We are still waiting for this national hospital and the draw could be in place before we know it.
I welcome the Minister to the House. I am grateful for him coming to the House to take this motion in person because it is an important matter.
I wholeheartedly support the spirit of the motion and know Senator O'Donnell is genuine in her concerns and those concerns are not to be dismissed or taken lightly. I would like to be able to vote in favour of the motion but as the expression says, it is more than my job is worth, I would be expelled from the parliamentary party due to an archaic whip system which is an absurdity on a motion. The Seanad should be allowed a free vote on such matters, if only to express our concerns.
The expression "If it is not broken, why fix it?" comes to mind. The national lottery was well constructed and has worked well over decades. As the Minister pointed out, it has yielded a significant €4 billion for worthy and charitable causes. I am concerned we have hitched the lottery wagon to the national children's hospital, for which the entire country is crying out. We commend the Government for the progress it is making, for finally choosing a site and proceeding with the matter after years of prevarication and delay. Are we saying that if we do not get the correct bid and a bidder who pays the money up-front, we will not get the children's hospital? Did we really put all our eggs in the one basket? That is a danger attendant in this approach. While it is creative, it is risky because the Minister cannot foresee the outcome of the tendering process. If we do not get a bidder who is willing to put that kind of money up-front, does that mean we will not have the funds to build the children's hospital?
If we do not get the money, we do not have it by definition.
My understanding is that we should build the hospital anyway. The funding is already embedded within the national lottery process in that it generate funds on an annual basis. The Minister asked Senator van Turnhout where she would get the money but normally these projects are not paid for up front, they are paid for over a 20 year period.
A wealth tax would help.
I see nothing wrong with that. Rather than having a dedicated lottery for the hospital, the State should continue to run the national lottery. There is not a citizen in the State who would mind the Government parking the good causes for however many years to say all the money generated by the lottery-----
Therefore, we shut down all the sports groups and the arts.
We will come to that in a second.
I have no ideological objection to this because we should make sensible decisions rather than getting hung up on who runs what and who owns what but we have precedent in this area, where a previous Government, with the best intentions I am sure, privatised Eircom on behalf of the State and it turned out to be a get rich quick scheme where everyone was supposed to walk away with a windfall and Eircom would become a great new company in private hands and we all know what happened next. It was a fiasco, for which we are still paying the price.
I opposed it at the time for that very reason.
The Minister is embracing it now.
Therefore, we should re-examine the essential privatisation of the national lottery. The same pitfalls are embedded in this legislation.
I also fear there is an element of not wasting a good crisis. Some people have an interest in selling off State assets like the lottery and Coillte. It is short-sighted and should be revisited. If we look at where we turned to the private sector in terms of roads and tolls, we paid them enough up-front to do the job and then promised them more money even when motorists pay a high fee to use the toll bridges. Now we are subsidising them on top of that because of a flawed strategy where we top up payments to the private companies that run the toll roads.
This Government has done Trojan work and I commend the Minister and his colleague the Minister for Finance for making considerable towards regaining our economic independence and coming out from underneath the strictures of the troika. We are within touching distance of going back to the markets and having our own independence. I respectfully suggest, therefore, that this is not the time to sell of the family silver. It is a time to take a long-term view. I agree the national lottery yielded billions for the arts and community projects and sports organisations, but I would question where some of that funding went. I doubt it was ever intended for it to go to exclusive golf clubs. There is not a person in the State who would begrudge the money from the national lottery being set aside for the national children's hospital.
I welcome the Minister's comments about the insidious invasiveness of online gambling. It is now in our living rooms; it is impossible to watch any sport now without gambling being available. People do not have to leave the comfort of their homes to spend the family's income for the week. That is a danger and it is important the Minister appoints a regulator to put a back stop in place for that.
We need clarity on this. If we are going to proceed as the Government is minded to, we must be clear about what is happening and ensure there are safeguards in place in the legislation to make sure we do not create bigger problems.
I also welcome the Minister to the House. It is important that he came here for this debate. We are all rightly concerned about the future of the national lottery. The motion that has been tabled and I fully support its thrust and logic, gives us an important chance to debate the future of the national lottery.
It strikes me that there is nothing the Government will not privatise, there is nothing it will not sell off. We know some State assets are to be sold and that the Government is priming the privatisation of water services at some point through the establishment of Irish Water.
The Senator knows that is not true.
Time will tell. Trees are to be privatised. Now the national lottery is to be privatised. It comes as no surprise to me but it comes as a surprise to many of those who voted for the Labour Party and perhaps that is one of the reasons the party is now so low in the polls.
I strongly support the core principle of the motion is that the national lottery licence must remain fully within the ownership of the State and that the benefits of the lottery must be used for the material benefit of the people. That must be the core principle of the national lottery.
The National Lottery Bill is going through the Dáil and my party colleague, Deputy Mary Lou McDonald, has had exchanges with the Minister in the House and has expressed our concerns about that Bill.
My problem is that the Minister has not provided a clear rationale for the proposed changes to the regulatory framework, licensing process and national lottery expenditure. Currently, one third of the income generated from national lottery's sales is allocated to good causes and community organisations rely heavily on this funding stream. As part of the new licensing arrangement, the Government is proposing to award a 20 year licence worth €1.2 billion without including a legislative clause to preserve the proportion of income used to fund good causes at the current level of 30%.
There is no such clause in the current legislation.
This is unacceptable.
There is nothing in the 1986 Act.
The Minister has been shaking his head a great deal but it is sometimes wiser to listen. He has had an opportunity to speak and will have a further opportunity to respond.
I am correcting the Senator on facts.
When introducing the 1986 legislation, the Minister of the day spoke of the need for public trust and confidence in the operation of a State lottery. In that respect, we have been served well by An Post. The Minister referred to EU competition law. In extending the term of the current contract by 18 months, did he breach EU competition law and, if not, why can the contract not be extended for a longer period?
One of the hooks on which the Minister is trying to sell this deal, if it can be described in such terms, is that we can front-load capital funding for the national children's hospital. The best way to fund hospital building projects, including the new national children's hospital, is to ensure we have sufficient tax revenue to pay for them. For this reason, Sinn Féin has put forward proposals to increase taxation. Our proposals include the introduction of third rate of tax of 48% on income in excess of €100,000 per annum, which is similar to a proposal made by the Labour Party when it was in opposition. This is but one of many examples of ways to fund capital projects and most certainly not the means by which some health capital projects have been funded in recent times. Documents leaked recently by RTE showed what was taking place in the south east in respect of the funding of capital projects. I do not see how any of what is proposed can be reconciled with the Government's new politics or described as a new departure from the way things were done in the past.
I am concerned about the reason the Government has adopted this approach. It appears to be a case of generating as much cash as possible without considering the long-term consequences of its actions. This is not good governance or something we should support. When Labour Party Senators indicate they have genuine concerns about the legislation - I am not trying to score political points - it is incumbent on the Minister to listen.
I support the Independent Senators and welcome their decision to raise this important issue and afford us an opportunity to discuss it.
I also thank Senator Marie-Louise O'Donnell and Independent Senators for raising this issue, as it is a good idea to debate it. The Bill is a practical and sensible solution for two reasons. First, it ensures an upfront boost for the taxpayer and will generate additional moneys throughout the duration of the licence and, second, it creates a framework which allows the State to receive the best possible bid and, as such, derive the greatest possible benefit.
As has been noted, the terms of the licence are not included in the Bill, although the legislation provides that the licence should be published and publicly available with the exception of commercially sensitive information. It is expected that the licence will be extended in duration from the current ten year period to a 20 year period, an up-front payment will be made to the State by a new operator and the current management fee will be replaced by an operator's fee which will generate greater profits for the successful company. These measures are welcome as a 20 year bidding period adds stability. It is also important given the likelihood that numerous bidders will seek the contract.
As the Minister noted, the rationale for the new approach is to help generate funds to build a new national children's hospital. While I accept that this is an emotive argument, assets are acquired and built up over time in order that they can be liquidated when money is needed. While it is a pity that we must sell the national lottery, it makes sense to do so in the current climate.
As official figures have not been provided on the revenue the sale will generate, I tried to get to the bottom of the issue. It appears the licence will generate between €400 million and €600 million for the State. Perhaps the Minister will enlighten us in that regard. Notwithstanding the final figure, the proposal to sell the lottery license remains a sensible one.
The legislation allows for the possibility that the national lottery will be managed by a private operator, permits online sales of lottery products and sets out the key principles for the regulation of the national lottery. For reasons outlined by the Minister, it does not preclude An Post or the State from bidding to operate the national lottery, providing only that a private operator may compete in the bidding process and thus ensuring an optimal outcome for the State. After the bidding process has been completed, the current operator may be awarded the licence to operate the national lottery.
I share concerns expressed by previous speakers about online sales of lottery tickets and I am heartened to learn that the issue is being examined. Gambling is a frightening issue and one on which we require a general strategy. While the national lottery is a form of gambling, other aspects of gambling are of much greater concern. I commend the Minister fjor his work and while I cannot support the motion, I thank Independent Senators for tabling it.
My colleague, Senator Thomas Byrne, has outlined the Fianna Fáil Party position on this issue. I am interested in the figures involved in the sale of the national lottery licence and the Government's view that the lottery has been a wonderful and extremely successful facility. As the Minister will be aware given that his party was in government at the time, the national lottery Act was a welcome innovation which was embraced by the electorate in what were straitened and difficult economic times. People asked why we had not introduced a lottery much sooner.
If I am correct, under the original terms of the Act, all of the money generated from sales, with the exception of administrative and management fees, was to be spent on what are euphemistically described as "good causes". As far as I can recall, the legislation spelt out what proportion of revenue was to be allocated under various headings such as sport and recreation, national culture and heritage, the health of the community and youth welfare and amenities. I believe this is the reason members of the public embraced the national lottery. I am of the opinion, although there is no evidence to suggest this is the case, that a secondary consideration for a significant number of those who buy lottery tickets every week is that the money will go to good causes. While they may not necessarily purchase a ticket for altruistic reasons as they also hope to win, at the same time it is nice to know that money is being allocated to good causes, even if, in reality, only 30% if revenue is allocated for this purpose.
The national lottery is essentially a slush fund for the Exchequer and has been used as such by successive Governments to finance various Departments. The money allocated under the 30% rule is allocated by the various Departments within which the various categories of heading fall. Considering that provisional figures, either from this year or last year, indicate that €761 million was collected from the national lottery, why was it not suggested in discussions surrounding this Bill that the Government revert to the original terms of the National Lottery Act, under which all the money would go to good causes?
For a start, 55% of revenue is allocated to prizes, while a further 6.5% goes to agents and so forth.
Is it correct that only 30% of what is left goes to good causes, with the remainder going to the Exchequer?
No, 55% of income from the lottery is allocated for prizes, 6.5% goes to agents and so forth and in excess of 30% is allocated to good causes. One then has administration costs.
In that case, none of the income remains in the Exchequer.
I did not say that.
It is an interesting point. The Minister is making the point that an up-front payment is being sought in order to finance construction of the new hospital. Therefore, it is important-----
Perhaps the Minister would clarify the point.
The figures are, prizes, 55%, good causes, just over 30%, and costs, including rebates to the retailers, is the balance of just under 15%.
Therefore, no money is retained by the Exchequer.
That is an important point to make. The view has been that when the changes were made by the Fianna Fáil Government, money was being retained and how much was allocated was then at the discretion of the line Minister. Am I correct in assuming that under the national lottery Bill, the 30% will be ring-fenced?
That is not provided for in the original Bill and will not be included in the current one either.
Okay. I share the view, which the Minister does not share, that a one-off lottery each week for a period of weeks, which money would to be dedicated towards funding the children's hospital, would not result in a drain of funding from other areas. I do not believe there is any scientific evidence to support that.
No, none at all.
I think that is an opinion that has been expressed within the Minister's Department to offset this particular argument. Everything is evidence based. There is no evidence on which to base that particular assumption.
Can the Senator give assurances in that regard?
It works both ways. The Minister also cannot give an assurance. He is putting it out that he is against this particular concept, which is an innovative one, based on no evidence, yet Senator O'Donnell has put forward evidence that when it was used for the Olympics in the UK, it worked.
Several references were made to online and interactive gambling. I understand the online gaming industry is to be regulated and that it will be taxed. That is another possible source of income. A very significant amount of money is generated from online betting and other forms of gambling. Perhaps the Government would consider increasing the proposed 15% tax, which appears to be the European norm, to 20% for a period, which money could be used towards financing construction of the new children's hospital. I am disappointed the Minister believes this would not work.
In Switzerland, the semi-postal is used to fund good causes. It is called "pro patria". While letter writing is a declining concept, there is still much usage of stamps in the business area.
An Post has to exist too.
Yes. The semi-postal system involves the issuing of a specific stamp, the funding from which goes specifically for good causes. Perhaps it is an idea that might be considered in the context of the overall funding of the national children's hospital. I await with interest the bids expected that are going to generate the €400 million required. Everybody across the House shares the Government's view that the children's hospital should be built as quickly as possible and that the resources required to do so should be provided.
I wish to share my time with Senator Hayden.
Is that agreed? Agreed.
I welcome the Minister to the House. I recall the day the national lottery was launched. I purchased a £2 ticket that day for one of my children, who won £2 in that draw. I thought it was a good idea, although it was opposed at the time by the Fianna Fáil Party. I am sure Sinn Féin would also have opposed it. As I said on another occasion, were we to give Sinn Féin the winning lottery numbers for Saturday, they would oppose that too. Fianna Fáil rowed back on its opposition to it when in government as it saw the value of it in terms of funding.
As in the 1980s, we are in economically tough times. The establishment of the national lottery in 1986, when times were tough, was a great move on the part of then coalition Government. It has been so successful, with €4 billion of funding from it benefiting every town and village throughout the country. There is hardly a football, tennis or GAA club or community that has not benefited from funding from it.
The children's hospital is an important matter. However, I do not believe people buy national lottery tickets because they think their local club might benefit from funding from it, rather they buy them, as I do, because they hope to win €50 or €500. They buy a scratch card hoping they might get three stars and get to spin the wheel and win a larger amount. We all wish for that. I am sure everybody here has played the lotto. Playing the lotto is not gambling. I have never heard of a person who is addicted to playing the national lottery. Gamblers are usually addicted to playing the slot machines and so on. The national lottery is a good way of collecting money to the benefit of the country.
It is important the purchase of the national licence is put out to tender. As stated by the Minister, it will be awarded to the highest bidder, who will then generate money for the company. As the licence will return to the ownership of Government in 20 years time, we still have a grasp on it. The national lottery has been successful. I am sure the children's hospital will benefit from it in the future. I am sure future generations will see this as a good move. I appreciate the concerns of Senator O'Donnell and others in terms of our losing control of the national lottery. The record will show that it has been progressive in terms of providing funding.
I thank Senator O'Donnell and her colleagues for tabling this motion, which is well intentioned. I did, however, have a sense of déjá vu when I saw it in terms of us having had a similar debate on a similar motion in this House.
The principal difference as I see it is that we would have a dedicated draw, the funding from which would be used on a drip, drip basis to fund the children's hospital. I propose to make the same points which I made in that previous debate to which I referred earlier. The Minister has addressed the concerns raised. From a personal perspective, I believe the Minister's response has been robust in terms of his defence of what is proposed. It is somewhat ironic to hear Senator Mooney talking about the intentions of the Government and the ways in which construction of the children's hospital could be funded given Fianna Fáil when in government had 14 years to do so to no avail. There were no special stamps for sale during Fianna Fáil's reign.
Always the bitter word.
A number of good points have been made during this debate, which have been addressed by the Minister. The time to sell an asset - the lottery is not being privatised, rather it is being licensed - is when one needs money. The time to sell is now. We have waited for far too long for a new national children's hospital. If I had any belief in Senator O'Donnell's proposal, I would be the first to support it. However, I do not. I do not believe we can wait one minute longer for a children's hospital in this country. The time to sell this asset is now.
The lottery is not a port, strategic infrastructural asset or a bog. I do not believe its sale will impact in any way on the capacity of the economy to do its business. The Minister in previous speeches has given many assurances in regard to national lottery employees and the retailers likely to be impacted by sale of the licence. We will probably have another robust debate on this matter when the Bill comes before the House. My view on this matter has not been changed. As far as I am concerned, the Minister has given a guarantee that there will be an up-front amount of funding set aside for the construction of the national children's hospital, which is 14 years too late.
I welcome the Minister to the House. It is probably not best to speak last because everything that has been said were words I was going to utter. This is like déja vu because on 26 May last, we had a debate on a similar motion. I am somewhat confused because I cannot understand how the motion is reappearing, particularly at a time when the National Lottery Bill 2012 is being debated in the Dáil. In a few weeks, when the Dáil has finished debating all Stages, it will be sent to the Seanad for the Second, Committee, Report and Final Stages. It will have been debated in this House at least six times. In view of the fact that the national lottery is the subject of new legislation being debated in both Houses, perhaps it would be wise of Senator O'Donnell to wait until the Bill reaches the Seanad and speak to the legislation at that stage.
An bata scoile.
I hope all Members have bought their lottery tickets because in one hour we will go into a draw. I remember when the then Minister, Donal Creed, introduced the national lottery in the 1980s. At the time, the funds were to go to sports and the arts. I am delighted to say that sport has definitely benefited throughout the years. In the London Olympic Games we saw the great success of Irish Olympians, with more Olympic medals than at any other time since 1956. Those athletes have benefited from the contribution from the national lottery.
A dedicated draw to benefit the national children's hospital simply will not work. As someone who has been involved with Our Lady's Children's Hospital in Crumlin since 1985, I know a dedicated draw would be objected to by every other charity in the country. A dedicated draw would be objected to by the citizens of this country because they would ask why they should spend their lottery money on it when taxpayers should be paying for it. I disagree with a dedicated draw.
The national lottery is not being sold. It is up for renewal and, under EU law, the State is obliged to hold a competition for the next licence. The national lottery will continue to be owned by the State through the Minister. Inasmuch as the lottery is held on behalf of the Minister, the goodwill and rights pertaining to the national lottery are vested in the Minister. After the licence expires, the national lottery will be run by the regulator or, where no regulator is appointed, by the Minister until a new licence is awarded.
What the Government is doing has been done successfully in other EU countries, such as the United Kingdom, France, Spain, the Netherlands and Sweden. Even in the United States, it has gone out to tender and been successful. We must think outside the box at this most difficult time. The Government is being creative, innovative and is creating an opportunity to generate additional financial resources to provide vital elements of social infrastructure for our population. Ireland is experiencing a difficult financial and economic challenge and because of this, the Government decided the licence must go to tender. In fact, it is not that the Government decided it because it is EU law. I am not sure what to believe of reports coming from the media of between €400 million and €600 million upfront payments to the State. There is a report in The Irish Times referring to €100 million but I am not sure what numbers to believe. I have faith in the Minister and what the Government is doing.
This is not a blindfolded quick pick or a lucky scratch card. This is a guaranteed lottery win for the State, on behalf of the citizens, to cash in on what we have built up for the past 26 years. It is not like our hard assets. If Senator Norris found out they were selling the Joyce Tower or the Cliffs of Moher to a commercial bidder, there would be uproar. This is completely different. The money generated from the upfront payment will certainly give the Government the impetus to at least get the foundations of the new national children's hospital built. In the lifetime of this Government, when the lottery is sold and if the up-front payment achieves anything between €100 million and €600 million, at least it will be a down payment on the hospital.
The Bill repeals the 1986 Act and, in doing so, develops the legislation for the national lottery. However, it does not alter it significantly. The Bill will provide greater transparency about the licence and will provide an enhanced system of compliance and enforcement. The main changes implemented by the Bill are to provide for an independent regulator, which will be chosen by the Minister, to oversee the operation of the licence and competition for any new licence. This is done on behalf of the Minister. The regulator has investigative powers and a progressive series of enforcement procedures that can ultimately lead to a High Court action and the revocation of the licence.
Under section 9, the functions of the regulator are as follows: to license the holding of the national lottery-----
The Senator's time is up.
-----and where no licence is enforced, the regulator can hold and procure the holding of the national lottery to ensure the national lottery is run with all due propriety; to ensure the interests of the participants in the national lottery are protected; to ensure revenues allocated to good causes are as great as possible; and to monitor and enforce compliance by the operators. The Minister has indicated he will safeguard the allocation of revenue to good causes.
The new model for the operation of the national lottery ensures it will be properly run and overseen by the regulator. It presents a real opportunity for the State to generate much-needed funds to benefit the community and the country.
Did the Senator ever continue running after he hit tape? He hit the tape at six minutes.
I did not realise that.
The Senator's speech was so impressive.
I noted the suggestion by Senator Eamonn Coghlan of selling the Cliffs of Moher. The biggest problem is that they are priceless.
I consider the national lottery to be a national treasure. The legislation introducing the legislation the national lottery was passed when a Minister was part of a coalition Government between 1983 and 1987. In its 25 year history, the lottery has enriched society in a myriad of ways, through sports, health care, education and care of the elderly. It made community-based projects possible when they would not otherwise have been possible. It also provided a great source of entertainment and fun for millions of Irish people who participated in lottery games.
I hear the well meaning concerns of Senator O'Donnell. I have spoken to her about it on a number of occasions.
An bata scoile.
When talking about change, we all get nervous. As an agent in Clare selling national lottery products on a daily basis, I have an attachment to the State national lottery and the An Post National Lottery Company. Change is always challenging for everyone. I have thought long and hard about this and have read the legislation and the supporting documentation. As late as today, I looked at what was produced by the Oireachtas library and research service. It is probably change for the better.
In recent times I felt the national lottery needed to be changed. I am deeply uncomfortable with the lottery providing an online service, www.lotto.ie, where people can gamble online. One of the criteria of the licence as it applies to agents, usually small shops throughout the country, is that there are rules and regulations prohibiting the sale of lottery products to people under 18 years of age.
If someone has a clear problem with gambling, the agent is obliged to try to ensure that the person does not spend all of his or her resources on gambling. Unfortunately, there is not this type of restraint in a bookie's. It certainly does not apply online. It will be a challenge for the Minister to address this online issue with a new company, but he has absolute integrity and a long history in politics spanning a number of Governments. He will make his decision based on the best advice and international experience.
I am concerned about the future of the retailer. The national lottery has been the backbone for many families. However, I am reassured by the fact that the commission paid to retailers will be ring-fenced.
Like every Senator, I would like an Irish company to run the national lottery, but we are a member of the European Union. Is there a way around this issue? If so, the Minister will identify it. During the next 25 years, the national lottery in whatever guise or corporate governance structure will provide much-needed resources for many hundreds of worthwhile projects throughout the country.
I have listened to this interesting debate and look forward to discussing the legislation when it is laid before us. I wish the Minister well in his endeavour.
I have also been asked to second the amendment, which I do now.
To address Senators Eamonn Coghlan and Hayden, just because a person says something once, does not mean that he or she cannot say it twice or thrice. I am entitled to table the same Private Member's motion as many times as I like. The patronising of me has been extraordinary. It is as if I needed to be talked to. The patronising is obfuscation.
The Minister is a worthy opponent. When I stated "opponent" previously, I meant it in the most gracious sense, in that my opinion and belief in this matter differ from his. I take him at his word, but selling the lottery licence is wrong and I am opposed to it. Senators must stop hiding the sale behind renewal. They are different issues, but they are being married together as if one is necessary because the other is being done.
I accept the Minister's statement that he has not met any bidders, but his Department has been speaking with someone. He has no discretion in whether to hold a competition for the next lottery licence. As he stated, if the Government does not hold one, its members will go to jail. However, it was a Government decision to sell. I suggested a figure of €500 million because it was quoted in our most learned newspapers. I read numerous articles. We could sell the licence for an up-front payment of €500 million, to the highest bidder or for an amount of between €300 million and €500 million. Even though I am against the sale, I would like to believe that, if it was done and the Apaches got me in the end, it would be sold for the highest price. We are discussing the pennies of the poor.
Whether the Government ring-fences the 30.5% for good causes is not the issue. Rather, the sale is the issue. If the Government is going to open up online gambling, why can we not attempt it? Why must it be meted out to someone else, be it Lottomatica or GTECH? Why can we not get the profits? Why must we always copy elsewhere? Why is New South Wales the guru for what we should be doing? I have stated all of this earlier. Why would someone give the State €200 million, €300 million or €600 million unless he or she was going to get something in return? I do not care whether a company gets that something next week or the week after, but it will get a major return over 20 years. That money should come to us.
An Post cannot bid. From where will it get €500 million or €400 million? It will not be able to bid. It may be a partner, but only a small partner in such a bid. We should get the money upfront. Regardless of whether we restrict, tax or legislate for the upfront money, the consortia bidding - the GTECHs and big gaming boys - will take in a great deal of money. Consider the ESRI report. That money belongs to the disadvantaged, the less well-off, the poor, the dreamers and the me. It is our money, which has been held brilliantly. An Post is unmatched in how it has run the system. Let An Post do it. Let An Post open up online gambling. Let An Post be our new Lottomatica.
There is an hypothecated lottery in England. It is big word that means a parallel draw, which is done one day per week and was used for the Olympic Games. I would like to see the evidence of how it undermined good causes. The claim that good causes would be undermined if the Irish lottery's Wednesday draw was opened up to include the national children's hospital is disingenuous, given the fact that Ireland is the most generous country in the world. The time has come and gone, given the figure for Government bonds is at 3%.
To address Senator Noone, how does an up-front payment ensure a boost to the taxpayer? She mentioned that gambling was frightening and it was a pity that we needed to sell. Gambling is not frightening for the gaming boys who will buy the licence. We cannot ask the poor to bail out gambling casinos. I will try not to allow it to happen. Good causes will be cordoned off, but I do not want the profits on my lottery ticket going to a pension fund somewhere in Ontario.
The Senator would be good on "Winning Streak", if she ever won.
Senator Leyden is not allowed to make those types of comments from the Chair.
Am I not?
Amendment put and declared carried.
Motion, as amended, agreed to.
When is it proposed to sit again?
Tomorrow at 10.30 a.m.