The National Lottery had its worst year in 2002 as confusion over the euro changeover and cooling in the economy triggered a €5 million sales slump.Revenue slipped to €533.1 million from €538.1 million in 2001, the first year-on-year decrease in the company's 16-year history, its annual report shows.

Hardest hit were sales of the "Lotto" prize-draw, which dipped €20 million to €285.3 million. Instant game sales rose marginally to €144.3 million from €143.9 million.

Money raised for the Government fell for the first time to €172.9 million from €175.8 million. Amounts given away in prizes declined by nearly €2 million to €280.9 million, 52.7 per cent of sales.

Executives shrugged off the downturn at a press conference yesterday, saying the company achieved record sales in the three months to Christmas.

The sharp turnaround, which has continued for the first two months of 2003, suggests the slump was a statistical blip attributed to uncertainties over the introduction of the euro, they said.

However, the Lottery declined to break down revenues and would not reveal how much fourth- quarter sales rose by.

Director Mr Ray Bates said the introduction of new products and pricing structures in September had attracted customers back in numbers

"There was a genuine uncertainty about the value of the euro," Mr Bates said.

"We transferred the price directly into euros, which was very awkward and meant people having to deal with lots of different coins.

"People said they did not like the 95 cents price per panel. People genuinely didn't know whether a euro was equal to a pound or whether two euro were equal to a pound."

The major upgrading of technology was another factor in the decrease. The process involved the replacement of all central system hardware and software, as well as the replacement of 3,500 terminals across the State.

The fall in Lotto sales resulted in part from players switching to the enhanced Lotto Plus game, which recorded a 24 per cent increase in revenues to €76.2 million. A less-than-expected number of "roll-over" jackpots dampened public enthusiasm and sapped Lotto sales, the company added.

Operating costs last year were 8.7 per cent of sales, or €46.1 million. Agents received €33.1 million in commission and bonuses, 6.2 per cent of sales.