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Sunday 23 October 2016

Lotto and regulator face backlash for 'double whammy' on customers

Paul O'Donoghue, Emma Jane Hade and Philip Ryan

Published 08/08/2015 | 02:30

Charities fear they will lose out if Lotto sales drop as a result of price hikes
Charities fear they will lose out if Lotto sales drop as a result of price hikes

Charities fear they will lose out if Lotto sales drop as a result of price hikes.

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And Premier Lotteries Ireland (PLI) - the new operators of the National Lottery - face a major backlash after announcing that the basic cost of playing two lines will increase by €1.

The odds of winning the jackpot have also been stretched from eight million to one to almost 11 million to one after they decided to add two new numbers to the matrix.

The National Lottery Regulator repeatedly refused to tell the Irish Independent whether it had consulted with consumer groups before approving the move.

However, a spokeswoman said the decision was "a result of in-depth discussions we had with the operator".

She said they had taken several factors into account including any impact on the reputation or sustainability of the National Lottery as well as "player protection".

It also said that it considered "the impact on funds raised for good causes".

"We discussed all of the issues with them and they have outlined their decisions and processes. We were satisfied that they had fulfilled the criteria," she said.

However, lottery bosses admitted that a drop in sales would result in a corresponding reduction in funding for charitable groups.

They currently receive almost 30pc of the revenue from the game and scratch cards as part of the National Lotteries policy.

The Jack and Jill Foundation, which receives €75,000 a year from the Lotto, said it was "concerned this hike in the price of lotto tickets will deter people from purchasing".

"My instinct says, upping the price and extending the odds is never a good idea. Although we are glad to see that the payout for five numbers will increase to over €100,000 and that may help," said Jonathan Irwin, CEO of the Jack and Jill Foundation.

Deirdre Garvey, chief executive of The Wheel, a national network representing 1,150 charities, warned: "When the new licence was awarded to Premier Lotteries Ireland, charities were assured that while they will be getting a smaller percentage of the income, the overall income from the National Lottery will increase, thus offsetting any losses incurred by charities. We expect this commitment to be honoured."

The new owners PLI, who paid the Government €405m for a 20-year operating licence last year, are likely to be called before an Oireachtas committee to explain the changes.

Finance Committee chairman Liam Twomey said the price hike and extra numbers was an "unfair double whammy" for people who buy lotto tickets.

"I think it's grossly unfair and if enough committee members feel the same we will certainly bring it before a hearing," Mr Twomey said.

PLI has argued that the 'Bigger Better Lotto' changes, which come into effect on September 3, are the first price increases in nine years.

A spokeswoman said the company's significant trading loss last year was not factored into its decision to raise prices.

The firm made a pre-tax loss of €17.4m in the period from May 22, 2013, to the end of December.

It had sales of €56.8m during the period. However, the company was only trading for a one-month period, so the €56.8m in sales only reflect the company's operations during December 2014.

Fianna Fáil public expenditure spokesman Seán Fleming said it was "not good enough that people are now being expected to pay more for less".

He described the Lottery Regulator as "another new quango" set up when the Government "should have kept direct control of this area in the public interest".

Irish Independent

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