The National Lottery’s share of the Irish gaming market is coming under pressure from alternative forms of gaming and “substitute” lotto products, according to a new report.
The research by consultants Indecon, commissioned by the National Lottery, estimated that the franchise now commands just 13 per cent of the State's €5.6 billion betting and lottery market.
While annual lotto sales recovered from a post-crash low of €670 million in 2015 to more than €800 million last year, sales are still below the boom-time high of €840 million recorded in 2008.
This may be down to “the growth in alternative forms of gaming and of substitute products”, the report suggested.
In particular it highlighted the rise in online gaming and the growth in bet-on-lottery operators, where players can bet on the outcomes of national lotteries without purchasing a ticket.
National Lottery chief executive Dermot Griffin has previously accused operators such as Lottoland and jackpot.com of "siphoning off" revenue from the business and from good causes.
These firms have eaten into traditional lotto sales in other countries. While there are no figures for the market share they command here, the report indicated Irish consumers were more aware of these new sites than consumers in other countries, a worrying finding for the lotto here.
In a statement, Lottoland and MyLotto24 rejected the idea that online betting was undermining good causes funding, saying it was “grossly misleading” and a “red herring” to deflect attention from questions about operator Premier Lotteries Ireland’s business model.
The statement quoted a recent study by economist Jim Power that found lottery betting operators Lottoland, MyLotto24 and Lottogo.com, had combined lottery betting sales of €1.4 million in 2017, compared with PLI’s €559 million in draw-based sales.
Lottoland and MyLotto24 accused the report of overlooking “key concerns” raised by Mr Power’s study, which included the performance of the National Lottery’s digital channels, and price increases.
"As today's report has proven, yet again, there is no evidence that the existence of greater consumer choice which online betting facilitates is in any way undermining good causes funding in Ireland, " the statement said. "However, regrettably, PLI continues to use this red herring as a way to deflect attention away from serious questions it should really be addressing about the threat that its' own business model poses to the long-term future of good causes funding'.
The report, commissioned by the National Lottery, assessed the socio-economic impact of the lottery here. It estimated the National Lottery contributed €1.97 billion directly and indirectly to consumer expenditure last year. The figure was generated through a complex formula of multipliers.
The business itself, however, generated around €800 million in sales, of which €452 million is returned in prizes.
While operator Premier Lotteries Ireland directly employs 119 staff, the report estimates that about 17,000 jobs are supported through National Lottery funding, which supports a range of community and sporting organisations.
The franchise has generated €5.1 billion for good causes since its inception in 1987, including €226 million last year.
The report also highlighted that National Lottery players spent an average of €160 a year on tickets and scratch cards in 2016, 10 per cent up on the previous year. This ranked the Republic 50th out of 100 countries worldwide in terms of per-capita spending on lottery games.
A demographic breakdown of Irish lottery players showed a greater proportion of weekly lottery players were male and over 35. The analysis also showed the social and economic class breakdown of lotto players was similar to that of the overall population, disputing findings elsewhere.
“This is the first detailed analysis of the impact of the National Lottery in Ireland in several years and the findings showcase its importance to communities and economic life all over Ireland,” Mr Griffin. “The National Lottery is deeply embedded in Irish life and its tangible positive impact is clearly laid out in this report.”