KENNY CALLS FOR GREATER TRANSPARENCY IN LOTTERY GRANT DISBURSEMENT

Posted on February 6, 2013 5:21 PM   |   Permanent Link   

The National Lottery Act of 1986 provides the legislative basis for the National Lottery. The current National Lottery licence, which is held by An Post National Lottery Company, is due to expire in 2013. I would point out that the National Lottery is not, in my view, being sold. The licence to operate the National Lottery is being sold, which will generate revenue for the State. This is not the same as selling the National Lottery.

Obviously, there will be a competition for the award of the next licence and that the successful bidder for the new licence will be required to make an advance payment to the State. The objective of the licence competition is to procure a substantial up-front payment for the Irish State in return for granting an exclusive right to operate the Irish National Lottery for a 20-year period while still retaining significant annual revenues for good causes.

Because of this, the legislation governing the National Lottery needs to be revised. The Bill before the House is in many respects based on the 1986 Act, which is now being repealed, but also includes certain new provisions, for example the establishment of a new independent National Lottery Regulator.

The new legislation intends to continue with the provision of a framework for the operation of a National Lottery. It is also intended to continue to safeguard the integrity and viability of the National Lottery, for example through the safeguarding of cash generated by Lottery sales, the approval of Lottery games by the Regulator, and the provision of ''step in'' powers for the Regulator.

The Bill provides for the establishment of a new National Lottery Regulator, who will be independent of the Minister for Public Expenditure and Reform and the Government, and this is something that I welcome. It is intended that the new Regulator will be funded by an annual levy to be paid by the operator of the National Lottery.

The Bill provides that the National Lottery will continue to be operated by a distinct company, whose sole purpose will be the holding of the National Lottery. The Minister will no longer have an involvement in the company -- he will not hold shares in the company or appoint its directors. Again, this separation of political power from the National Lottery is something I support and welcome, as I think that independence in this regard is essential.

The Bill contains a number of provisions in relation to the regulation of the National Lottery, for example provisions regarding the sale of tickets and the circumstances in which a licence may be amended or revoked. The Bill provides that, in the event of the licence being revoked, the Regulator will have ''step in powers'' to take over the management of the National Lottery.

The Bill provides for the sale of National Lottery tickets via interactive channels as well as through retail outlets. In an international context, lotteries are doing more business through interactive channels. The playing of lottery games on the internet is seen as the most likely area of growth for lottery sales in the future. I think that this development needs to be observed carefully and that steps will need to be taken to try and guard against gambling addictions being formed, and also to guard against existing gambling addicts being enabled to continue to feed their habit, which is immensely self-destructive. I recall the misery caused in this city by the scourge of one armed bandits before Councillors on Dublin Corporation rescinded the adoption of the Gaming and Lotteries Act in the Dublin city area in the late 1980's.

Local shops face significant challenges in the current economic environment, and as an essential part of our local communities; they should be afforded all protections that are possible in terms of their revenues. In that light, I would like to see the modest margin paid to retail agents, I believe it is 6%, protected in the new legislation, and I welcome that the Minister has said he will ensure that this is case in the Licence itself, where deciding the rates of the margin paid to agents are more appropriately contained.

I understand that discussions have begun between management and unions in relation to how arrangements for the new National Lottery licence may affect the serving staff of the current operator. I want to say that the statutory rights of staff need to be taken into account and protected and their past service also needs to be recognised.

I would hope that with the continually improving sentiment towards Ireland in the financial markets that a substantial up-front payment can be achieved for the Licence. It is important that a good deal is achieved in this regard as the more income the State is able to generate, the better for its people.

In conclusion, I wish to refer to the disbursement of Lottery Grants for sports activities. I believe that greater transparency is needed and that the decision making function should be transferred to local government. The present position perpetuates the perception that party political considerations play a part in deciding who gets lottery funding.