Public Expenditure and Reform | National Lottery advertising funds and returns to community
To ask the Minister for Public Expenditure and Reform the extent to which advertising forms part of the budget of the National Lottery; the sources of the total expenditure; the extent to which 90% of funds available to the National Lottery, as is claimed are returned to the local community; if the administrative costs of the operation of the lottery are therefore 10% or otherwise; and if he will make a statement on the matter.
The following material has been submitted to me by the Regulator of the National Lottery for use in answering this question.
Under the terms of the Licence to operate the National Lottery, the Operator is required to advertise and promote the National Lottery in two respects:
A. Base Marketing:
The operator is required to undertake “base marketing” expenditure that is “fundamental to the promotion and operation of the National Lottery in the ordinary course”. Some of this marketing expenditure goes on advertising. Base marketing expenditure must be funded entirely by the Operator; and
B. Incremental Marketing:
“Incremental marketing” is all marketing expenditure other than base marketing. Some of this marketing expenditure goes on advertising. Incremental marketing expenditure can be funded by expired unclaimed prizes and/or by the Operator.
The current National Lottery advertisement states “Did you know that 90% of your money goes back into the community? Community means 56% Prizes, 29% Good Causes, 5% Retailer Commission. Based on 2021 financials.” The advertisement describes the remaining 10% of sales revenue as going to “Running Costs and Profit”.
The National Lottery is regulated by an independent Regulator created under the National Lottery Act 2013. As part of her role, the Regulator monitors the advertisements of the National Lottery to ensure that they are compliant with the terms of the Licence and a detailed Advertising and Promotion Code of Practice which conforms to advertising standards generally in the State.
The Regulator of the National Lottery reviewed this advertisement when it first aired and found that it complied with the Licence and the Code. As detailed below, the 90% figure is the sum of three figures that each accurately reflect the 2021 audited accounts of the Operator (shortly to be laid before the Oireachtas) and the terms of the licence to operate the National Lottery. The remainder goes to the Operator of the National Lottery.
- The figures of 56% going to prizes and 29% going to good causes used in the advertisement accurately reflect the 2021 audited accounts of the Operator of the National Lottery (extract from page 3 below),.
Extract from Audited Accounts of Premier Lotteries Ireland DAC
For financial year ended 31 December 2021
- The figure of 5% of overall sales going to retailer commission accurately reflects the requirements of the licence to pay a 6% commission to retailers and the level of retail sales in 2021.
Clause 4.7 of the Licence to operate the National Lottery provides that the Operator must pay retailers a percentage commission of 6% for all National Lottery Games (except Lotto 5-4-3-2-1 for which the rate must be 5%). Where a ticket for a National Lottery game is sold online, there is no commission to be paid as the operator is the retailer. The 2021 audited accounts of the operator of the National Lottery report that 16.6% of National Lottery sales were online in 2021 and 84.4% were in retail. That is, around five sixths of National Lottery sales, by value, came through retail agents and resulted in commission to retailers – i.e. total retail commission represented 5% of total sales in 2021.
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