Rehab made just €9k profit from €4m card sales

The fundraising efforts of the charities sector came under renewed pressure last night after it was revealed that Rehab Lotteries made a profit of just €9,452 from scratch card sales totalling almost €4m in 2010.

Of the €3.969m of Rehab scratch cards sold over a 12-month period in 2010, they delivered a profit of just 1% for the company.

The shocking figures were revealed in the Dáil last night by Justice Minister Alan Shatter, who said an audit was carried out by the Department of Justice on the Charitable Lotteries Scheme funds received by Rehab for the two-year period from 2010/11. He said the audit found costs were so high they resulted “in a low profit margin”.

Mr Shatter said the audit revealed that of total Rehab Bingo Sales of €3.19m, profits for the company were €548,000.

In summary, the figures provided by Rehab show gross lottery sales of almost €7.2m in 2010, yielded a net profit of €558,000.

Mr Shatter said in Nov 2011, he met with Rehab and “queried the size of the profits accruing from the scratch card product of the Rehab Lottery, noting that it generated a profit of only €9,452 based on product sales of close to €4m”.

Mr Shatter the Charities Lotteries Scheme, which the scratch cards and other games operate under, was no longer “fit for purpose” and this was the main reason why in 2012, he decided to wind down the scheme over a three-year period. However this decision is the subject of judicial review proceedings brought by the Rehab Group and Rehab Lotteries in July of last year, and a High Court decision is still awaited.

Mr Shatter said Rehab was suing the State for up to €1.5bn in a separate litigation under competition law.

“Whatever the outcome of this costly action, it is likely to exert a significant burden on either public resources or charity resources or both. This seems to me unfortunate at a time when both public and charity resources are under such extreme pressure to meet the frontline needs of our citizens as we work together towards our recovery,” the minister told the Dáil.

He said at a Dáil justice committee meeting Rehab had referred to the winding down as “a shocking decision” by Government.

“I hope after this evening, my approach to the scheme is now better understood,” he told the Dáil during the Sinn Féin private members Charities (Amendment) Bill 2014.

A spokesperson for the Rehab Group could not be contacted last night.

Rehab Lotteries’ chief Angela Kerins recently called for transparency in the charities sector but refused to reveal her salary when asked a number of times. Her salary is believed to be around €240,000.

Public and political anger has erupted over he past few months after it was revealed funds donated to the Central Remedial Clinic were used to top up salaries and pensions of top executives.