Shopkeepers fear lotto licence takeover will cut sales margins

Shopkeepers have expressed concern that the proposed sale of the National Lottery licence will have a negative impact on their business unless the Government provides safeguards to protect their revenue.

Yesterday, RGDATA — the representative body of 4,000 independent grocers and convenience stores — called on the Public Expenditure and Reform Minister Brendan Howlin, to specify that any new licence holder should provide the current sales margin to retailers.

RGDATA said many of its members who are National Lottery agents are concerned at the Government’s proposals to issue a new 20-year licence for the lottery which is currently held by a subsidiary of An Post.

RGDATA director general Tara Buckley said shopkeepers were worried that margins on sales of lottery games would be cut by any new licence holder as they would seek to recoup their investment.

It is reported the Government may seek an upfront payment in excess of €600m for the licence — with a large part of the proceeds likely to be ring-fenced to fund construction of the new National Children’s Hospital at an undetermined site in Dublin.

Lottery agents currently receive €6 for every €100 sold in tickets.

“There is a real concern among the RGDATA membership that the new arrangements for the award of the National Lottery will see a new operator, having paid hundreds of millions to get the licence, slash the current low margin paid to retailers in order to recoup the cost of the upfront payment,” said Ms Buckley.

She claimed retailers had played a crucial role in the growth and development of the National Lottery over the past 25 years.

She said the “modest margin” of 6% must be protected under any licensing arrangement with a new operator. She claimed a similar condition was imposed during a recent competition for the lottery licence for New South Wales, Australia.

Ms Buckley also expressed concern that there may be a reduction in the current level of lottery revenue which goes to prizes and good causes which could impact on sales.

Mr Howlin has signalled that 30% of lottery sales will be ring-fenced for good causes under the new licence. However, the current rate is 32%.

RGDATA also warned that any changes in the day-to-day business relationships could make many businesses unviable given the tough trading economic climate.

A Department of Public Expenditure and Reform spokesperson said Mr Howlin would be happy to discuss the issue with RGDATA before finalising the sale for the new lottery licence.