‘Parasite lotteries’ a threat to good causes, Government warned

National Lottery sales are at risk of being cannibalised by an influx of so-called parasite lotteries with potentially hundreds of millions of euro being diverted away from good causes, the Government has been warned.

In past 18 months alone, 15 offshore-licensed operators have entered the Irish market, according to the Revenue Commissioner’s website.

Operators such as Lottoland, Jackpot and Multilotto offer consumers a chance to play National Lottery and EuroMillions draws without buying a ticket, relying on a complex formula of hedging and insurance to cover potential payouts.

Described as an Uber-style assault on the traditional lotto business, bet-on-lottery websites have mushroomed around the world, eating into the market share of traditional state lotteries, in some jurisdictions by as much as 20 per cent.

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National Lottery operator Premier Lotteries Ireland (PLI) said it could not, as yet, quantify the impact of these new offshore operators on sales here, but claimed they were marketing themselves aggressively in Ireland.

“They don’t publish accounts here so we don’t know what their sales are,” a PLI spokeswoman said. “But applying the UK experience to Ireland, it is estimated that the cumulative detrimental impact on returns to good causes over the remainder of the National Lottery licence, which goes to 2033, could run to hundreds of millions,” she said.

Legislation

PLI is calling on the Government for tougher legislation to clamp down on the activities of these entities, claiming that while they held remote bookmakers’ licences they were essentially unregulated.

“They market themselves as being ‘licensed to operate in Ireland’, creating the impression of regulation where none is applied,” the PLI spokeswoman said.

“Despite holding a remote bookmakers’ licence issued by the Irish national excise licence office, these companies operate under no regulatory authority or regime, creating an inequitable market for the National Lottery.”

The Department of Public Expenditure said it was aware of the issue and had met both the National Lottery regulator and PLI to discuss the issue.

Several offshore operators are now undercutting the National Lottery by offering EuroMillions bets for €2 per line, which is 50 cent lower than the actual ticket price of €2.50 per line.

Many of the sites also provide introductory offers such as free plays or “buy one, get one free” offers, which the National Lottery is forbidden to do under the current legislation.

A spokesman for Lottoland said: “Claims that we are ‘offshore’ or not ‘officially sanctioned’ are clearly false.” He added that the operations had been fully licensed by the State.

He also said PLI’s turnover had continued to grow significantly since lottery betting operators were licensed in 2016, noting that Lottoland’s turnover in Ireland in 2017 was 0.11 per cent of PLI’s income in 2016.

“By far the biggest threat to good causes’ funding from lottery-related sources is the treatment of unclaimed prizes, which are no longer ring-fenced for good causes,” he said.

“As with any responsible corporate entity, Lottoland is committed to corporate social responsibility and is developing a number of initiatives in the market that include a partnership with a major charity,” he added.