A research report from Dublin City University Business School found that Irish charities and good causes lose up to € 43 million a year due to the National Lottery licencing terms and business practises of the state.
The losses are said to be the product of Premier Lotteries Ireland’s business approach, which inked a € 405 m 20-year contract to run the National Lottery five years ago.
Undertaken by DCU economist Tony Foley and commissioned by the European Lotto Betting Association,’ An Analysis of Good Causes Funding Associated with the National Lottery and Factors Impacting its Long-Term Sustainability,’ four key factors have been identified which it says influence funding.
The first of these illustrated is an unprecedented level of unclaimed prizes returned to the owner which stood at about € 19 m in 2018 alone.
In addition, Foley’s report also stipulates a decrease in the funding contribution of good causes relative to National Lottery sales, an increase in prizes as a share of sales and an ongoing digital performance of the lottery.
In a continuing change in consumer habits to digital platforms, this latter argument was called “a clear and significant concern for its future.” Online sales accounted for only 7.7 per cent of total sales in 2018, compared to a previously stated target of 15 per cent set at the licence start.
Foley explained on the findings of his report. “Over the last thirty years, the National Lottery and its contribution to good causes funding has been an important source of financial support to community and voluntary organisations in every parish, constituency and county in Ireland.
“Today’s research highlights that there are several key issues that present a risk to the long-term sustainability of this vital funding.
“The perceived threat of online lottery betting to good causes funding is in fact minimal in today’s terms, as indicated by the market share held by the licensed operators like Lottoland, especially in light of the robust sales performance of the National Lottery.
“The reality is that issues such as the reduction in good causes funding as a percentage of National Lottery sales in recent years, the ongoing limited digital performance of the National Lottery, reduced player participation and the extent of the unclaimed prizes expected to be returned to the operator over the 20 year license, are far more significant threats to the future of the good causes funding.
“There is also inadequate transparency around aspects of the current financial performance and regulation of the National Lottery, which is making it difficult for policymakers to assess the extent of the problem and to take appropriate steps to address these issues.
“The National Lottery regulator can support policymakers by ensuring that they have access to more detailed information than currently appears to be the case. Better availability of information would contribute to ensuring that the right decisions are made to address the most significant risks to the long-term sustainability of good causes funding”.