John Maguire, of Rehab Lotteries, insisted Mr Shatter’s criticism of the high cost of the scratch cards was unwarranted and misleading, despite the figures that showed that out of €4m sales in scratch cards, profits were just over €9,452.
Mr Maguire admitted “profits have been low” and provided the Irish Examiner with a limited breakdown of the €1.3m in scratch card costs, saying 12.5% went to retailers, 5% on printing tickets and distribution, 60% in prizes, and the other 22.25% in “overhead costs”.
The only details supplied on overhead costs were 12 staff and two sales people.
Mr Maguire insisted the €1.3m in costs was “reasonable” despite Mr Shatter claiming the aims of such schemes was to maximise sales with no regard for operating costs or profits.
The minister said the Rehab lottery was designed to “leverage” monies from the State’s Charitable Lotteries Scheme. That’s one of the reasons he is phasing out the scheme, which compensate groups such as Rehab up to €5m per year because of the dominant position of the soon-to-be-privatised National Lottery.
However, Rehab has claimed its profits on the scratch cards would jump up from less than 1% to 30% of sales if the restriction on its prizes were removed. Mr Maguire said the Government could “not have it both ways, continuing the €20,000 weekly prize cap and phasing out the compensation scheme”.
He said that when all the facts are produced in public he would be surprised “if public opinion is not on our side, we are the injured party, we are the victims because the National Lottery has all the trump cards in a developing business”.
He refused to reveal up-to-date details of the salary of its CEO Angela Kerins, saying “it has nothing to do with me”.
Yesterday a member of the Dáil’s Public Accounts Committee claimed the latest developments were in keeping with the agenda of Camelot, who will soon take over the running of the National Lottery.
Fianna Fáil’s Sean Fleming claimed when the lotteries legislation was passing through the Dáil, representatives from Camelot met with him and made it very clear they wanted to “clear the playing pitch” so there would be no competition in the scratch card market.
He also claimed Camelot was concerned about lottery fundraising activities of the groups such as the GAA and “will try and put pressure on the Government in due course to put a cap on these and try and clear the pitch ... there’s a bigger picture here”.
The overall profit margin of Rehab’s lottery games is 8% and Mr Fleming said the margin was “ridiculous” and the charity should explain its cost structure. He pledged that the PAC would “get to the bottom of this”.
Meanwhile, Sinn Féin president Gerry Adams has said the refusal of Angela Kerins to reveal her salary and the lack of transparency around remuneration needed to be addressed. “Recent scandals such as the CRC and now major question marks over the fundraising at Rehab are causing enormous disquiet,” he said.
Fine Gael TD and PAC member Simon Harris said figures supplied by the HSE detailing the level of taxpayers’ money being paid to Section 38 and Section 39 organisations underlined the need for transparency
Section 38s received more than €2.6bn in 2012, while Section 39s received more than €765m.