Retailers fear transition to new lottery system may disrupt trade

Retailers are unhappy with assurances from the National Lottery that the impending switchover to a new system will not involve additional costs or a disruption to trade.

The operators of the franchise, Premier Lotteries Ireland (PLI), are planning to roll out a new technology platform later this year, which will involve replacement of some 4,000 ticket terminals across its retail network.

In a letter to the National Lottery in April, the umbrella group for retailers, RGData, raised concerns about the transition. Specifically, it sought assurances the installation of new terminals and their ongoing operation and servicing would not involve the imposition of any charges on retailers, who earn 6 per cent commission on ticket sales.

The group also queried whether the operator had a contingency plan should the transition result in a temporary drop in service.

In addition, it expressed concern the National Lottery’s new online channel would divert sales away from traditional retail agents.

In its letter, RGData asked PLI to quantify the extent to which the growth in online sales would cannabalise the traditional sales channels and what level of overall sales were expected to come from online in the first year of operation.

In a reply, PLI chief executive designate Dermot Griffin said the company was "very aware" of its commitments to retailers in terms of their commission under the new lottery licensing arrangements, and he pledged to keep them updated during the transition.

Concerns ignored

RGData’s director-general

Tara Buckley

wrote to Mr Griffin again last month, however, complaining none of the group’s concerns were directly addressed in his reply.

PLI has previously insisted the opening-up of the online channel can be done without eroding high street sales and would, in fact, have the opposite effect. The company believes more online players will result in bigger weekly jackpots, which, it claims, is more likely to boost lottery sales.

The PLI consortium, comprising An Post and the Ontario Teachers' Pension Plan, owners of UK operator Camelot, is banking on growing online sales to claw back its €405 million outlay on the licence.

Hardware and software

Greek firm Intralot has been employed by the new operators to overhaul the National Lottery’s central hardware and software system.

The 4,000 new terminals are to be installed at the retailers’ premises gradually before “a big switch-on”.

Retailers are fearful a possible glitch could damage sales in the run-up to Christmas.

In its original letter, RGData also expressed concern about proposed changes to the deposit bond retailers place with the National Lottery in return for ticket terminals. PLI is considering the introduction of a weekly payment in lieu of the deposit.

RGData also sought a response to a previous request for a once-off loyalty payment of up to €15,000 to each retailer as part of the transition.

Retailers are seeking this in recognition of the role they played in growing the business.

“As you can appreciate, the National Lottery is an important part of the business of RGData members and, as such, there is a concern and a need for assurance from Premier Lotteries Ireland about how the change in ownership will impact on the operation of the National Lotteries in the coming years,” Ms Buckley said.

“Retailers look forward to working with PLI but, as with any process of change, there are concerns about the impact of the new ownership structure on the relationship with the retail agents and network.

“Some of these concerns are fuelled by elements of the media coverage which have highlighted the imperative for the new licensees to get a return on the investment of €405 million paid for the 20-year licence,” she said.