THE NATIONAL LOTTERY lobbied the government to introduce legislation that would prevent bookies being able to take bets on the outcome of lotto draws.

In documents released to TheJournal.ie under the Freedom of Information Act, the National Lottery made a number of submissions to Minister for Public Expenditure and Reform Paschal Donohoe on the matter last summer and in October.

The main thrust of its argument is that Irish bookmakers make profits off people betting on the lottery that could instead be used for good causes which the National Lottery contributes to.

Betting on the National Lottery and betting on the same lotto draw in the bookies have a number of differences. While the price of National Lottery tickets is fixed (eg €4 for two lines on the Saturday or Wednesday draws), in the bookmakers you can select how many numbers you want to bet on and choose your own stake.

As well as allowing people to bet on National Lottery draws, bookmakers also accept bets on lotto draws they run themselves and broadcast in shops, in some cases as many as 10 an hour.

The National Lottery argued to Minister Donohoe that this had a “material impact” on its own business and “diminishes the attractiveness” of its products that are “inherently dependent on mass participation”. 

‘Protecting the National Lottery’

On 3 July, a representative on behalf of the National Lottery contacted Minister Donohoe and CC-ed the department’s secretary general Robert Watt ahead of the Gaming and Lotteries Amendment Bill being discussed at committee.

“I apologise for the urgency but I would greatly appreciate an opportunity to discuss this with you before the newly scheduled vote of 11 Thursday, as this matter has considerable impact on the National Lottery and hence the State and its good causes,” the letter said.

In an attached letter, it set out the case for “protecting the National Lottery, through regulation of bookmakers by Gaming and Lotteries Amendment Bill”. 

It goes on to set out how much money it believes bookmakers generate from betting on the lotto, and provides figures assuming that this money was bet on National Lottery products instead.

It said: “My best estimate is that bookmakers generated in the order of €400 million of turnover on ‘lottery like’ and ‘bet-on-lottery’ products in 2018, primarily in betting shops but also online.

While this represents less than 8% of the Irish bookmaking industry’s €5.2 billion turnover in 2018, it represents nearly 50% of the National Lottery’s turnover in the same year.

It goes on to say that if this €400 million was spent on National Lottery products instead, the Good Causes Fund would benefit to the tune of €112 million a year. This is compared to the “€8 million in betting duty which the State raises from that activity currently”, according to the National Lottery.

As noted here, the Good Causes Fund is a contractual obligation of the company that runs the National Lottery. It doesn’t exist solely for paying winnings, and giving to good causes however, as the firm – whose majority owner is a Canadian pension fund – also aims to turn a profit.

Banning bookies from these kinds of lottery bets would also protect local employment among the “5,000+ National Lottery retail network”, the document said.

It said these products by bookmakers are “having a material impact on National Lottery participation rates that reduces the returns to the Good Causes Fund and diminishes the attractiveness of those National Lottery products, which are inherently dependent on mass participation”. 

It added to Minister Donohoe:

I wish to protect and grow the National Lottery, by encouraging safe and responsible play. This in turn protects local employment through our retail network, protects and grows the Good Cause Fund and protects the value of a state asset for future generations. I hope you share this ambition.

Pre-budget submission

The reply from Donohoe didn’t come until 27 July.  He said that regarding the legislation, it was actually the responsibility of the Department of Justice and to redirect correspondence there.

In another submission to the Department of Public Expenditure and Reform in October, however, the National Lottery again requested a meeting and said it was told by the Department of Justice to raise the issue with Minister Donohoe’s department.

In another submission, it again highlights the “disruptive market threats” from bookmakers allowing bets on the Lotto, Euromillions and Daily Million draws.

“Urgent action is required if the damage being caused to the National Lottery franchise is to be stopped”, it said, adding that the Gaming and Lotteries Amendment Bill provided an “immediate mechanism” to address this.

It went further, arguing that it “reduces value of the asset” that is the National Lottery and that the “State should be concerned” about this.

In another suggestion for banning lotto betting in bookies, the National Lottery also said that market developments around “unregulated onshore and offshore lottery betting” have resulted in “new and highly addictive formats of betting being rolled out online”. 

Given the exponential growth of betting lottery operators and the damage that is being inflicted on the National Lottery and the stakeholders, it is imperative that the exposures identified above are tackled. 

In any case, the Gaming and Lotteries (Amendment) Act 2019 passed all stages of the Dáil on 4 December 2019 and was signed into law on 21 December 2019.

There was no provision within that piece of legislation prohibiting bookmakers from the kind of lottery betting that the National Lottery lobbied for.

In a statement to TheJournal.ie, a National Lottery spokesperson said: “Premier Lotteries Ireland remains concerned at the rapid growth in recent years of bet-on-lottery operators in Ireland. This poses a serious threat to the Good Causes fund… Premier Lotteries Ireland continues to liaise with Government on this matter.”

The Irish Bookmakers Association, meanwhile, says that such a move as desired by the National Lottery would “commercially assist/benefit a monopoly supplier in Ireland by excluding competition and choice”.

Its chairperson Sharon Byrne told TheJournal.ie: “[Betting shops] are a significant contributor to the exchequer and provide many jobs in towns and villages all over Ireland.

To introduce an amendment to prevent them from offering this product [is]  surely anti-competitive and facilitates a monopoly provider by excluding competition from a long established product.