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Retailers fear loss of income when Lotto goes private

SHOPKEEPERS fear they will lose out when the lottery is privatised later this year.

And Public Expenditure Minister Brendan Howlin is refusing to guarantee their share of lotto ticket sales. However, he has agreed to meet them before legislation on a new licence is finalised.

Retailers fear that the 6pc margin they earn on ticket sales will be slashed when the lottery is sold to a private operator.

Earlier this month, Mr Howlin announced a new 20-year National Lottery licence, with the successful bidder providing an upfront sum to the State. It is thought the sale could raise in the region of €600m.

Part of the capital raised would finance the provision of a National Children's Hospital.

Mr Howlin has agreed to meet with RGDATA, the retailers' representative group, but a spokeswoman would not confirm that its key demand -- the ring-fencing of the 6pc margin -- would be met.

The National Lottery pays about €40m a year to retail outlets that sell tickets to the public.

With about 4,000 individual shops, that amounts to an average of around €10,000 each.

However, RGDATA insists that the service is not free to provide and that shopkeepers have had to adapt to the financial downturn.

"We have found over the last couple of years that a lot of the providers of some of these services -- like bill paying services, paying your tolls, topping up your mobile phone -- the people who supply these think that they can squeeze and squeeze the margins on retailers," said Tara Buckley, RGDATA director general.

"We cannot sit back and allow that."

Damien Thompson, who runs the Donnybrook Fair shop on Dublin's Baggot Street, said the concerns were well-founded.

"It's a 6pc margin. The average independent store has wages that run between 12pc and 14pc of sales so if you take that into account, it doesn't cover the cost of the person selling the tickets," he said, adding that the service itself can be time-consuming.

"There are a few retailers out there that don't take the lotto because they know there are a lot of headaches with it."

Support

A statement from the department acknowledged the central role newsagents play in the lottery operation.

"The support of the newsagents is vital for the ongoing success of the National Lottery," it said.

"Mr Howlin is happy to have discussions with the RGDATA before the finalisation of any legislation on the new licence arrangements."

However, a spokeswoman would not be drawn on whether or not the 6pc margin would be protected as part of any deal.

A number of potential operators are expected to compete for the licence.

As part of the deal, the fixed 30.5pc of annual lottery turnover going to good causes will be retained.

The An Post National Lottery Company has held the present licence since 2001.

Invitations for tender for the new licence are expected this August, with a successful bidder likely to be identified next January.

Irish Independent