A DECISION to phase out and ultimately abolish State funding for lotteries run by private charities is being challenged in the High Court.
The Rehab Group and Rehab Lotteries Ltd claim the decision made by Justice Minister Alan Shatter last month to phase out funding under the Charitable Lotteries Scheme will damage their ability to help those with disabilities.
In a letter, Minister Shatter said that it had been decided to phase out, and ultimately abolish the scheme by 2016, due to the current economic situation the country is facing.
The scheme was set up in the mid 1990's to compensate private charities due to the advantage the National Lottery had over them.
Rehab, which is the largest beneficiary of the scheme, says it will suffer the "greatest adverse impact" from its abolition.
The Court heard that under the scheme in 2011, charities received €6m, €4.4m for Rehab, which operates lotteries including scratch card games.
In its action against the Minister, Rehab is seeking a number of orders from the court including one quashing the Minister's decision along with declarations including that he failed to take into account relevant considerations before taking the decision.
Rehab says the Minister failed to act in accordance with fair procedures by failing to afford it (Rehab) the chance to make any submission before taking the decision to phase out the scheme.
Moving the application yesterday, Paul Gardiner SC for Rehab said that Rehab has been running lotteries since the 1950's. There had always been cap imposed on the prize money it and other charities running similar schemes could pay out. The cap stands at €20,000 per month.
Rehab was never able to compete with the National Lottery because it has no restriction on the value of prizes it can offer.
Counsel said that that Rehab share of the Lotteries market, which was at 25pc before the National Lottery commenced in 1987, now stands at 1pc, compared to the National Lottery's 98 per cent share.
Counsel said the money paid to Rehab and the other charities under the scheme came from the National Lottery and not from government funds.
In an affidavit, Rehab group CEO Angela Kerins said more than 20 well known national and local charities, such as ISPCC, Asthma Society of Ireland, Irish Wheelchair Association, and Irish Cancer Society received funding under the scheme along with Rehab.
She said the Minister did not invite Rehab to make submissions or representations before making his decision. The abolition of the scheme will have a "significant and damaging impact on the continued development and enhancement of services to people with disabilities and those who are disadvantaged.
Mr Justice Michael Peart granted leave to bring the challenge yesterday and put the matter back to next January.