New report from leading economist Jim Power highlights the €43 million drop in good causes funding in last decade and the ongoing risk from the National Lottery’s monopoly position and lack of competition
Report outlines that, based on 2017 data from leading licensed lottery betting brands, there is no evidence to suggest that online lottery betting presents any meaningful threat to good causes funding from the National Lottery
Key report finding is that competition in the digital channel plus good regulation are critical in order to ensure long term sustainability of good causes funding in Ireland
Overall, report identifies new regulatory and licensing framework including all operators as the prime opportunity to align Irish market with other EU jurisdictions in terms of best practice standards
A report by leading economic analyst Jim Power, published earlier today, has highlighted a decline of €43 million or 16% in good causes funding from the National Lottery in the last decade (€268m in 2008 to €225m in 2017).
The report entitled ‘An assessment of the Online Gambling Market in Ireland and its impact on good causes funding by the National Lottery’, commissioned by the Irish-licensed operators Lottoland and myLotto24, also found no evidence that lottery betting, either online or via retail betting shops, is undermining good causes funding currently or threatens it long term. In the Irish market, there are currently six lottery betting providers holding Remote Bookmakers licenses including European Lotto Betting Association (ELBA) members myLotto24, Lottoland and MultiLotto.
The report, which provides an overview analysis of the entire Irish gambling market, assesses global economic opportunities, and explores means to protect the good causes funding associated with the National Lottery, was commissioned by the European Lotto Betting Association (ELBA) members Lottoland and myLotto24.
Mr. Power, an economist and University College Dublin lecturer, said, “It is factually incorrect to argue, or indeed lobby, on the premise that online lottery betting, which is fully licensed in this jurisdiction, presents any threat to the good causes funding generated by National Lottery sales each year. In fact, based on 2017 figures provided by the three leading ELBA members licensed and active in Ireland, their total combined draw-based betting turnover was only €1.4 million, 0.25% of the €559 million draw based sales turnover achieved by Premier Lotteries Ireland in the same period.”
“Contrary to previous media coverage, rather than damaging good causes funding, the long-term presence of these operators should actually have a beneficial impact by creating more competition, choice and innovation in what might otherwise be effectively a monopolised market.”
“Moreover, increased competition in the digital channel is an essential aspect in achieving long term sustainability for good causes funding. It is reasonable to expect that the holder of a national license, no matter the market, would provide product offerings in line with changing consumer trends but what is prevalent with the National Lottery license in Ireland since it was awarded nearly five years ago is an operator with a sales strategy massively at odds with such trends. Based on 2017 figures shared at Oireachtas Committee hearings, the digital channel only accounted for 6.5% of National Lottery sales in Ireland compared to 19.5% in the UK. With a 56% or greater increase in retail footprint for the National Lottery since 2014, this strategy clearly puts the long-term position of the National Lottery and the associated good causes funding at real risk. The question is why is this being allowed to happen?”.
The report also highlighted the ongoing issue around unclaimed prizes and the lack of transparency over what happens to these funds, how much they amount to annually and why the position in Ireland sees these largely retail-based funds return to the license holder whilst in the UK they are ring fenced for the funding of good causes.
Meanwhile, the report highlighted the ongoing support from ELBA members and the wider cohort of regulated gambling operators for a new and effective regulatory infrastructure for the industry, with the conclusion that the outdated nature of the current regulatory regime for gambling in Ireland having resulted in a sizeable historic loss to the Irish Exchequer in additional taxation and licensing income, not to mention the heightened concerns around problem gambling.
Power commented; “The modern Irish gambling industry is a multi-billion Euro industry, providing significant employment and tax revenues to the Exchequer. Tax receipts from betting in 2017 were €52.2 million in 2017, a 3% increase year on year, according to the latest data published by the Tax Working Group. However, the size of the retail and remote betting industry in Ireland can be estimated at about €5.07 billion.
“If the Government and the relevant Departments were to take a long-term view on the global opportunities offered by this sector, much in the way that they have viewed the wider tech sector, they would see that the short term move to double betting taxes on an already besieged, largely domestic market is not the way to best deliver a sustainable return to the Exchequer. Instead, by delivering the long overdue new regulatory framework with one Regulator for all licensed gambling operators, a competitive Gross Profits Tax based approach as is the case in other leading EU markets and setting up a task force to focus on foreign direct investment in the sector, the Government could deliver a long term strategy that would not only deliver economic benefits but would also help to effectively address issues like problem gambling.”