Legal action may hit sale of Lottery
Published 16/12/2012 | 05:00
PLANS by the Government to raise up to €600m through the sale of the operating licence for the National Lottery could be delayed and even hindered as a result of a legal challenge being taken against the Justice Minister Alan Shatter by one of Ireland's biggest charities.
The minister's decision to phase out and ultimately abolish funding for private lotteries by 2016 will be subjected to a judicial review in January, following objections by the Rehab Group, which is headed up by businesswoman Angela Kerins.
While the outcome of next month's High Court action remains far from certain, sources close to the case believe it could hamper efforts by the Department of Public Expenditure and Reform to raise the €600m it believes the lottery licence is worth.
Quite apart from the damage that could be done to the Government's Budget arithmetic, any delay to the licence sale could have knock-on effects for the new Children's Hospital given how €200m of the proceeds are due to be set aside for its construction.
Asked by the Sunday Independent if Mr Shatter is worried about a possible delay, a spokeswoman for the Department of Justice said: "As the decision to phase out the Charitable Lotteries Scheme is the subject of a judicial review, the department has no comment to make at this time."
In her affidavit to the High Court last month, Ms Kerins claims, among other things, that Mr Shatter failed to act in accordance with fair procedures by not affording Rehab the chance to make any submission before deciding to phase out the Charitable Lotteries Scheme.
Under the scheme – which has been in place since 1997 – private charities, including Rehab, have been entitled to compensatory funding arising from the commercial advantage the National Lottery has over them as a result of its ability to offer unlimited prize money. Charities such as Rehab have been limited to a weekly prize cap of €20,000 since 2002.
The Charitable Lotteries Scheme has gone some way to restore the equilibrium. In 2011 for example, €6m in funding was distributed to some 20 charities, with €4.4m of that sum going to Rehab for use in its work with people with disabilities and for the socially disadvantaged.
Elsewhere in her affidavit, Ms Kerins highlights a meeting she and other Rehab officials had with Mr Shatter in November 2011 in which she says he was fully apprised of the scheme and its merits. She claims Mr Shatter agreed that the scheme "continued to play an important role".
Notwithstanding his apparent endorsement of the scheme, Mr Shatter wrote to Rehab and other charities in October to inform them of his decision to phase it out and abolish it by 2016.