Diarmaid Ferriter: Lotto price rises have not helped those in need
Far too little focus goes on how lottery funds are distributed
The Celebrations perform at the National Lottery’s offices in the Irish Life Centre on Abbey Street Lower, Dublin 1: Just 30 cent of every euro spent on the Lotto goes to good causes. Photograph: Mac Innes
The new advertising campaign for the Lotto is making me nauseous. Apparently, those charged with the task of welcoming and serenading winners will be worn out from performing for the multitude of new victors. Since last week, the cost of playing the lotto has risen for the second time in three years with the price of a standard two-line ticket with the “Lotto plus” option increasing from €5 to €6. The Lotto organisers boast that as a result of the price increases there will be more winners and more millionaires. It could be you, of course, but it is very unlikely to be you. Before Premier Lotteries Ireland (PLI) made its first price increase in 2015 the odds of picking all six winning numbers were just over eight million to one; with the 2015 price hike that increased to 10.7 million to one and now you have to pay more to indulge your remote fantasy.
In 2014, PLI was awarded a 20-year licence by the government to operate the National Lottery and bought the franchise for €405 million. PLI’s shareholders are Ontario Teachers’ Pension Plan, An Post and An Post Pension Funds. Prior to the award of the licence An Post had operated the national lottery since its creation in 1986 after the decline of the Irish Hospitals’ Sweepstake, in operation since 1930. That there were so many post offices throughout the country (remember those days?) worked in An Post’s favour when it came to the awarding of the licence in 1985, as was the fact that it was a semi-state company. By 1989 the Lotto game was introduced and proved enormously popular.
The original Irish lottery was a sweepstake initiated as a way to raise money for chronically under-funded Irish hospitals and became internationally famous because of the scale of ticket sales outside of Ireland and the phenomenal prize money on offer. It made the organisers extraordinarily rich, particularly the families of Joseph McGrath, Richard Duggan and Spencer Freeman. Some estimates suggest £100 million was amassed by the three founding families.
Blind eyes were turned to the Sweepstake’s shortcomings and the extent to which it ultimately damaged the Irish health services by postponing necessary reforms and because not enough of the money raised went to Irish health infrastructure.
It was plagued by scandal, skulduggery, forgeries and gangsterism as outlined by historian Marie Coleman in her history of its operation, The Irish Sweep (2010). The wealth of the organisers stood in stark contrast to the degrading treatment of the Sweepstake workforce after the company’s closure. It became an embarrassment, but Coleman suggests, “The Irish government had learned its lesson by 1987 and did not award the national lottery franchise to a private corporation.”
Why is the proportion of the money generated by sales that goes to good causes so low?
By 2014 however, the lottery franchise was privatised. Embarrassingly, the Labour Party’s Brendan Howlin heralded this move early in 2014 when he was minister for public expenditure and reform. PLI, Howlin suggested, “will grow the business in a responsible manner . . . We can look forward to a greater annual stream for good causes” and the “good causes” fund would grow from €235 million to €300 million in five years. That did not happen. Last year the amount that went to good causes was €226 million, less than it was in 2011 when the figure was €232 million. So much for the charitable joys of privatisation.
PLI has complained about the various challenges posed by the internet and bet-on-Lotto operators, which, curiously, it criticises as “parasites”. But it was reported this week that the digital strategy of the National Lottery is paying off with nearly 10 per cent of ticket sales now generated online, equating to sales of more than €60 million, representing a fivefold increase since 2015.
There is also far too little focus on just how lottery funds are distributed and the profits that are amassed. Why is the proportion of the money generated by sales that go to good causes so low? We are told by PLI that, “The National Lottery was set up with the express purpose of raising funds for good causes” but they also tell us the portion going back to those causes is “almost 30 cent of every euro”.
How is this enough if raising money for good causes is the “express purpose” of the lottery and why was it agreed to in the first place given the squalid history of the Irish lottery?
Miriam Donohoe, corporate communications manager with PLI, insisted recently that, “When players see the value that they are going to be getting for the small price increase, they will be very happy”. There is little chance of such contentment. English politicians who more than 200 years ago wanted to make lotteries illegal, were spot on and timelessly acute in contending “no species of adventure is known where the chances are so great against the adventurer; none where the infatuation is more powerful, lasting and destructive”.