A Dublin City University Business School research report has found that Irish charities and good causes are losing up to €43m a year, due to the country’s National Lottery license terms and commercial practices.
It is said that the losses are a result of the business approach being pursued by Premier Lotteries Ireland, who inked a 20-year €405m deal to operate 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’ has identified four key factors that it says are affecting funding.
The first of these highlighted is an unprecedented level of unclaimed prizes returned to the operator, which in 2018 alone stood at approximately €19m.
Furthermore, Foley’s report also stipulates a fall in good causes funding contribution relative to National Lottery sales, increasing prizes as a share of sales and an ongoing under performance of the lottery on a digital basis.
This latter point was labelled “a clear and significant concern for its future” amid an ongoing shift of consumer habits to digital platforms. In 2018, online sales were only 7.7 per cent of total sales, compared to a previously stated target of 15 per cent that was set at the start of the license.
“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,” Foley explained on the findings of his report. “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”.