A lottery windfall
For once the sale of a State asset, the National Lottery, has been completed without either public controversy or political recrimination about sale of the family silver. The deal that the Government has struck with Premier Lotteries Ireland – which includes An Post and Camelot, a UK lottery operator – for the sale of the lottery license is a good one. The sale should leave most people satisfied: first, with the price obtained; second, with the terms agreed with the new operator; and third with how the Government plans to use the sale proceeds.
By selling the national lottery licence for €405 million, the Government has secured a sale price that is one third higher than initial industry estimates for the franchise. The terms of sale include a continuing State involvement, via An Post’s role. And, few will criticise how the Government proposes to spend the privatisation proceeds. For half the sum raised will be spent on financing the construction of the long awaited National Children’s Hospital in Dublin, with the first of two payments to the exchequer scheduled before year end, and the second next year. As the Government struggles to meet annual budget targets, and plans to leave the international bailout programme by year-end, the sale proceeds could not come at a more opportune moment.
Since its introduction in 1987, the National Lottery has proved highly popular with the public, and very beneficial for the charities, sporting bodies and worthy causes that have received lottery funding – over €4 billion in the past 26 years. Ireland, on a per head basis, spends more on lottery tickets than most other European countries. And while six years of austerity measures have depressed ticket sales somewhat during the recession, nevertheless the lottery has managed to retain its broad appeal to the public.
Recent changes made under the Lottery Act are seen as central to the growth of the National Lottery, and the income that it can generate for good causes. At present, just three per cent of its revenue comes from online sales, compared with 15 to 17 per cent in Camelot’s UK operation. The easing of legal restrictions on the online sale of lottery tickets has greatly enhanced the lottery’s potential for revenue growth. And the Government is confident that under the new licensing terms for the lottery the annual income for good causes, at present €225 million, can be raised to €300 million in five years.
The sale of the National Lottery marks the first in a series of disposals of State-owned assets – some €3 billion – designed in part to pay down public debt and, as in the case of the proposed sale of Bord Gais Energy, in part to finance a stimulus fund to boost jobs. The Government’s skilled handling of the sale of the National Lottery, hopefully, augurs well for successful completion of the rest of the privatisation programme.