Lotto licence

Max Powers · 05-04-2012 01:11PM #1

Does anyone think selling off the lottery licence to a foreign company is madness. I know it hasnt happened yet. Its clearly a cash cow. I know the govt probably has to open it up to all bidders but surely it should be kept Irish and everything done to keep it so.

I heard an economist from ULweeks ago say that state assets like ESB, aer lingus etc which really arent doing anything for the public purse should be sold off but to keep the lottery. It doesent take an economist to know that but he was the only person i heard say it in public.

Sleepy · 05-04-2012 01:16PM

We need a children's hospital. What else would you suggest we sell instead?

It's a 20 year deal, so whilst long-term, it's non irreversible, will provide us with a wedge of cash up-front which we'd otherwise be borrowing and whoever operates it will still be obliged to make hefty contributions to worthwhile causes.

Yes, it would be preferable for us if an Irish company are awarded the license but, as part of the EU, we can't put restrictions on these things. It's one of the prices of being part of the Euro, receiving EU funding for things and having them help our government try to clean up the mess of the previous administration.

eire4 · 05-04-2012 02:07PM

I don't like the idea of the lotto license going to a foreign company which is quite likely. But at least it is only a 20 year deal and not permanent. If the license does get sold abroad the government really needs to make sure we get a good price for this because as said elsewhere the lotto really is an easy cash cow for making money.

Dob74 · 05-04-2012 02:41PM

Max Powers wrote: »

Does anyone think selling off the lottery licence to a foreign company is madness. I know it hasnt happened yet. Its clearly a cash cow. I know the govt probably has to open it up to all bidders but surely it should be kept Irish and everything done to keep it so.

I heard an economist from ULweeks ago say that state assets like ESB, aer lingus etc which really arent doing anything for the public purse should be sold off but to keep the lottery. It doesent take an economist to know that but he was the only person i heard say it in public.

If we want a childrens hospital we should borrow the money. Why sell the golden goose?
Plenty of money being borrowed to bail out the banks so there is no excuse.
Sean Fleming of FF was on newstalk yesterday behind the idea. Must mean FF insiders will be getting the contract.

This state is still rotten to the core.

Permabear · 05-04-2012 02:48PM

This post has been deleted.

antoobrien · 05-04-2012 03:17PM

Permabear wrote: »

This post had been deleted.

How much is the children's hospital going to cost, €600m or so?

€244m in good causes eh. I can't think of a better cause (provided it's done right, see the infra threads for the arguments around siting etc).

Earmark 20% of the take for the children's hospital until it's paid for. That'll be €40-50m a year. It might take 15-20 years to pay for it, but isn't that the way capital projects are supposed to be financed?

Sleepy · 05-04-2012 03:22PM

Dob74 wrote: »

If we want a childrens hospital we should borrow the money.

From who? At what percentage rate?

ednwireland · 05-04-2012 03:26PM

eire4 wrote: »

I don't like the idea of the lotto license going to a foreign company which is quite likely. But at least it is only a 20 year deal and not permanent. If the license does get sold abroad the government really needs to make sure we get a good price for this because as said elsewhere the lotto really is an easy cash cow for making money.

under EU law it has to go to tender and anyone can apply gov stipulates prize money and how much goes to good causes (there was a bid in the uk lottery from virgin if i remember rightly to run at cost - camelot still won http://news.bbc.co.uk/1/hi/business/562161.stm

this as far as i can see isnt any thing apart from an expiration of the current licence to trun the lottery

The National Lottery Act, 1986, stipulates that the lottery licence must be reissued under a competitive-bid process at least once every ten years

Going Forward · 05-04-2012 09:50PM

I too get the jitters at the thoughts of state assets going to foreign operators.
Whether its a misplaced sense of patriotism, or a feeling that we are simply going to end up as a satellite of Britain.

We will lose our national identity to some extent if we sell the silverware (and some archaic work pracises in the process!).

The Royal Mail could well be delivering our post in 20 years at this rate.

Damien360 · 05-04-2012 09:51PM

The figures do not add up for this sale.

Currently the Post office makes €3 million per year profit from this. That is €60 million over 20 years ignoring inflation. But the government is trying to flog this for 20 years at €600 million.

That is €30 million profit per year for the company to break even. Where is that revenue going to come from ? Even if they paid a lot less to charities, that still does not add up.

I am not sure if the post office pays corporation tax on these profits but you can be damn sure a private company would have to pay this.

Anyone got an idea or accurate figures as this is off the top of my head.

Bullseye1 · 05-04-2012 09:54PM

Was this ever mentioned as a necessity for financing the Children's hospital prior to today?

Going Forward · 05-04-2012 09:57PM

Permabear wrote: »

This post had been deleted.

Its a pity the Lottery hasnt made any attempt to spruce itself up in the last number of years. (Think of the "Winning Streak" TV program, and compare it with the admittedly OTT UK equivalent.)

Imagine the fireworks and rebranding when a new operator takes over, and the consequent rise in profits, and prizes.

Pity we cant be a bit more pro active in the management of some of these valuable state resources.

Going Forward · 05-04-2012 09:59PM

Bullseye1 wrote: »

Was this ever mentioned as a necessity for financing the Children's hospital prior to today?

Its so there wont be any opposition to the idea, moral blackmail of sorts.

Bullseye1 · 05-04-2012 10:00PM

I thought the money had already been set aside? But now it appears it's dependent on the sale of the lotto?

K-9 · 05-04-2012 11:20PM

Bullseye1 wrote: »

Was this ever mentioned as a necessity for financing the Children's hospital prior to today?

I don't recall it, it's a very "will somebody think of the children" argument from Government.

I'm a bit uneasy with a lottery as a state resource!

Einhard · 06-04-2012 12:54AM

Bullseye1 wrote: »

Was this ever mentioned as a necessity for financing the Children's hospital prior to today?

Going Forward wrote: »

Its so there wont be any opposition to the idea, moral blackmail of sorts.

Bullseye1 wrote: »

I thought the money had already been set aside? But now it appears it's dependent on the sale of the lotto?

K-9 wrote: »

I don't recall it, it's a very "will somebody think of the children" argument from Government.

I'm a bit uneasy with a lottery as a state resource!

As far as I know, the government have always maintained that funding for the children's hospital will come from sale of the Lotto.

I really can't see the problem with this. Why on earth would we want to keep the Lotto in Irish hands when a foreign operator might offer a better deal? Seems rather silly to me. As things are, we stand to get a children's hospital out of this deal. As long as that's the quid pro quo, I don't care who the Lotto is sold to. Talk about misplaced patriotism!

andrew · 06-04-2012 01:19AM

I really don't get why the state runs the lotto in the first place. Healthcare I can understand. Public goods i can understand.. But a lottery?! The state has no business whatsoever in running a gambling business. I don't understand why it got involved in the first place.

MadsL · 06-04-2012 05:31AM

Going Forward wrote: »

The Royal Mail could well be delivering our post in 20 years at this rate.

Do you still have your internet through eircom?

Bullseye1 · 06-04-2012 08:17AM

I have no problem with the sale of the lotto but i would like a link to any statement from government that hospital is dependant on sale. That would be very telling.

Einhard wrote: »

Bullseye1 wrote: »

Was this ever mentioned as a necessity for financing the Children's hospital prior to today?

Going Forward wrote: »

Its so there wont be any opposition to the idea, moral blackmail of sorts.

Bullseye1 wrote: »

I thought the money had already been set aside? But now it appears it's dependent on the sale of the lotto?

K-9 wrote: »

I don't recall it, it's a very "will somebody think of the children" argument from Government.

I'm a bit uneasy with a lottery as a state resource!

As far as I know, the government have always maintained that funding for the children's hospital will come from sale of the Lotto.

I really can't see the problem with this. Why on earth would we want to keep the Lotto in Irish hands when a foreign operator might offer a better deal? Seems rather silly to me. As things are, we stand to get a children's hospital out of this deal. As long as that's the quid pro quo, I don't care who the Lotto is sold to. Talk about misplaced patriotism!

jack presley · 06-04-2012 08:27AM

Max Powers wrote: »

.

I heard an economist from ULweeks ago say that state assets like ESB, aer lingus etc which really arent doing anything for the public purse should be sold off but to keep the lottery.

That economist is out on his own on that one I think. ESB pays a large dividend to the state every year so his claim that they "aren't doing anything for the public purse" is fairly wrong. And has he not heard of Eircom? How did selling them work out?

antoobrien · 06-04-2012 08:50AM

jack presley wrote: »

That economist is out on his own on that one I think. ESB pays a large dividend to the state every year so his claim that they "aren't doing anything for the public purse" is fairly wrong. And has he not heard of Eircom? How did selling them work out?

The ESB paid €73m last year, Bord Gais paid €33m.

The question is not how much money they can get but how can they be made run more efficiently - hence with a lower cost base - while still offering a profit to the investor.

Sleepy · 06-04-2012 08:52AM

jack presley wrote: »

That economist is out on his own on that one I think. ESB pays a large dividend to the state every year so his claim that they "aren't doing anything for the public purse" is fairly wrong. And has he not heard of Eircom? How did selling them work out?

ESB pays a large dividend by over-charging the businesses which are the lifeblood of this country for electricity. Never mind their over-charging of every taxpayer for their domestic use of electricity or their obscene over-payment of their staff.

The Eircom floatation was a disaster in large part due to the huge chunk of the company their unions extorted from the taxpayer and the antiquated work practices they insisted on in a privatised company.

Neither case is relevant here since the National Lottery (a) currently returns relatively little to the state, (b) doesn't have any infrastructure of national importance, (c) isn't being sold: the parts of An Post currently operating the National Lottery will be closed and a new operator will take over if An Post lose the tendering process for the licence so any of the current inefficient work practices which almost certainly exist won't be an albatross around the new operators neck.

markpb · 06-04-2012 11:18AM

Why does everyone assume the contract will go to a foreign company? It's not a certainty.

Sleepy wrote: »

the parts of An Post currently operating the National Lottery will be closed and a new operator will take over if An Post lose the tendering process for the licence

I wonder what will happen the current APNL staff if they lose the tender - I can't see the An Post unions letting them be made redundant so An Post would end up with extra staff and less work which isn't great for them.

Also, I wonder who'll be liable for the previous wins after the business is transferred over - would APNL be liable for them for several years or would the outstanding amounts be figured into the transfer costs.

antoobrien · 06-04-2012 11:27AM

Sleepy wrote: »

The Eircom floatation was a disaster in large part due to the huge chunk of the company their unions extorted from the taxpayer and the antiquated work practices they insisted on in a privatised company.

That's a little unfair on the union, they thought McCreevy was pulling the p*ss with the lower share price on the prospectus. They went ballistic when he floated it nearly €1 higher than that.

Sleepy · 06-04-2012 11:36AM

anto - could eircom have been successful if it hadn't been unionised? My view is possibly. Their core-business is evaporating. To remain a viable operation they'd have needed the flexibility to completely re-configure their business (i.e. pull an IBM on it). With a militant, formerly public sector union in place that owned significant voting rights in the organisation they had no chance. Without it, they *might* have been able to transform themselves into a viable communications company.

antoobrien · 06-04-2012 12:16PM

Sleepy wrote: »

anto - could eircom have been successful if it hadn't been unionised? My view is possibly

Not relevant, they took the wrong model for eircom to have been successful, spinning off Eircell but keeping the landline business instead of doing what was done with ESB and separating generation, supply & the grid.

MadsL · 06-04-2012 06:27PM

markpb wrote: »

I wonder what will happen the current APNL staff if they lose the tender - I can't see the An Post unions letting them be made redundant so An Post would end up with extra staff and less work which isn't great for them..

It is not a huge staff, barely 100. Gtech look after the scratchcards.

If they doe get dispersed they have built up some good experience around Info Security and other standards which will be good for An Post.

In 2010, accreditation to ISO 9001 and ISO 27001 was maintained
through the operation of a Quality Management System and an
Information Security Management System. Last year, the National
Lottery also achieved certification to the ISO 14001 Environmental
Management System Standard.

http://lottery.ie/Global/reports/National_Lottery_2010_Annual_Report_Final.pdf

Villa05 · 06-04-2012 07:21PM

andrew wrote: »

I really don't get why the state runs the lotto in the first place. Healthcare I can understand. Public goods i can understand.. But a lottery?! The state has no business whatsoever in running a gambling business. I don't understand why it got involved in the first place.

they were involved in too many gambling operations. Ireland inc, bank regulation, anglo, nama. It all ended in disaster for the irish public

AlekSmart · 06-04-2012 07:37PM

Going Forward wrote: »

Its a pity the Lottery hasnt made any attempt to spruce itself up in the last number of years. (Think of the "Winning Streak" TV program, and compare it with the admittedly OTT UK equivalent.)

Imagine the fireworks and rebranding when a new operator takes over, and the consequent rise in profits, and prizes.

Pity we cant be a bit more pro active in the management of some of these valuable state resources.

Good point GF.

It always struck me as odd that the original (simplest & best) State Fund Raising scheme,The Prize Bond,was allowed to wilt in the blaze of "Loadsa Money" culture.

I remain sceptical of the State seeking to overtly promote gambling as an intrinsic method of the great unwashed becoming financially savvy.....Smells kinda Fianna Failish to me I'm afraid.....:rolleyes:

Lotto licence

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