Using good causes to justify bad numbers
Ireland’s National Lottery operator’s claims about the impact of lottery betting operators conveniently ignore the actual figures, says Joanne Christie
Given the number of times they were mentioned in the report published by Ireland’s National Lottery, one could be forgiven for thinking bet-on-lottery operators have completely taken over the Irish betting market.
The report noted that the market environment had undergone significant change over the past four years “[Most] notably, this includes the rise in online betting and the growth in bet-on-lottery operators, which allow players to bet on the outcomes of national lotteries without purchasing a ticket,” it added.
The Irish market has certainly gone through much change since the current monopoly operator Premier Lotteries Ireland (PLI) took over the lottery licence in 2014. But to claim the introduction of secondary lottery operators into the Irish market is among the most notable of these seems highly questionable. Particularly when one considers this period also included the introduction of the first licensing regime for online gambling.
The clear implication of the report is that secondary lottery operators are diverting funds from good causes funding, and National Lottery chief executive Dermot Griffin made comments to this effect when launching the report yesterday.
“Betting activities, while close substitutes for lottery participation, do not result in the distribution of funds to social and community organisations and are likely to have different economic and social impacts on the Irish economy,” said the report.
The claims were vehemently denied by Lottoland and myLotto24 in a joint statement yesterday: “As leading providers of online lottery betting in Ireland, Lottoland and MyLotto24 reject unfounded assertions by PLI that online betting is undermining good causes funding.
“This fact is borne out in PLI’s own report, undertaken by Indecon Consultants and published today, which was unable to quantify the size of the on-lottery betting market here, despite this fact having been formally established in a recent independent study undertaken by leading economist Jim Power.”
Indeed, despite PLI including data from a range of other sources in its report, including the UK’s Gambling Commission, it chose not to include the findings of the Power's report. Though curiously it used figures from the 2016 report despite the 2017 report having been published in February this year, and made assumptions about how these might translate to the Irish market.
Power’s report, entitled An Assessment of the Online Gambling Market in Ireland and its Impact on Good Causes Funding by the National Lottery, found that last year, the draw-based betting turnover of the three largest online lottery betting companies in Ireland was equal to just 0.25% of the draw-based €559m turnover of PLI.
“Despite claims to the contrary, there remains no data-based evidence that the recent introduction of online lottery betting or the long-term existence of lottery betting via retail bookmakers presents any threat to these funds, either currently or into the foreseeable future,” said Power in the report.
Given the National Lottery’s reaction to Power’s report at the time of its release in November was to robustly reject its findings and insist again that “these operators are clearly cannibalising our games”, it’s perhaps not that surprising it chose not to include these figures.
Granted, the report was commissioned by Lottoland and myLotto24. Given they have provided an independent economist with hard figures about their operations to allow for meaningful analysis, one could argue PLI is being misleading by choosing to ignore them and continue to argue that the size of the market is either: a) unknown; or b) much bigger than it actually is.
This is particularly the case when it has chosen to include numbers about Lottoland in its report when it suited its purpose. For example, by stating that when an online lottery betting service launched in Australia, it pulled in a quarter of a million sign-ups in the lead-up to the $1.6m US Powerball jackpot.
The questions thrown up by Power about PLI’s own failings were perhaps another powerful motivator in PLI vehemently opposing the research.
“Today’s Indecon report commissioned by PLI chose to overlook key concerns around the PLI business strategy and performance highlighted by the Power report, particularly the under-performance of the National Lottery’s digital channels (which only delivered 6.5% of PLI sales in 2017 versus the UK Lottery equivalent of 19.5% for the same period), it’s aggressive anti-consumer price increases and the lack of transparency regarding the use of the significant annual unclaimed prizes, which, unlike in the UK where they are ringfenced for good causes funding, in Ireland are returned to PLI as the incumbent operator,” said the Lottoland/myLotto24 statement.
Indeed the last point is a salient one – since the PLI took over the licence, the treatment of the estimated 2% of unclaimed prizes has changed. It now goes back to PLI for marketing and other costs and Power’s analysis estimates that as much as €15m could be going back to the lottery each year. It could therefore be argued the monopoly itself has taken far more from good causes than secondary lottery operators when one considers their combined turnover in Ireland is only a fraction of this.
PLI’s claims about the dangers lottery betting operators pose to good causes appears to be nothing more than an attempt to kill off any competition and retain an absolute monopoly in all things lottery.
Unfortunately, however, this tactic has paid off for monopolies in both the UK and Australia so lottery betting operators will have to hope Ireland’s politicians aren’t as easily swayed by the PLI’s bunch of careful selected statistics.
Irish National Lottery hit by lottery betting growth
Lottery betting giants slam Irish National Lottery report
Strength in numbers: can collective action prevent more lotto betting bans? (paywall)