Socio-Economic Impact of the National Lottery

Indecon International Economic ConsultantsIndependent Socio-Economic Impact Assessment of the National Lottery

AExecutive Summary

Socio-Economic Impact of the National Lottery An Independent Assessment

Prepared by Indecon Research Economists www.indecon.ie

December 2018

Contents

Tables, Figures & Boxes ii

Glossary of Terms and Abbreviations viii

Executive Summary ix

1 Introduction and Methodology 11.1 Introduction 21.2 Methodological Approach 21.3 Report Structure 61.4 Acknowledgements and Disclaimer 6

2 Development of National Lottery in Ireland 72.1 Trends in Lottery Sales 82.2 Innovation and Product Development 92.3 Summary of Key Findings 16

3 Assessment of Micro-Economic and Social Impacts 173.1 Introduction 183.2 Funds raised for Good Causes all over Ireland 183.3 Impact of Funding to Good Causes 213.4 Funds Returned to the Community – Prize Winnings 253.5 Impact on National Lottery Retail Agents 343.6 Summary of Key Findings 44

4 Assessment of Macro-Economic Impacts 454.1 Introduction 464.2 Expenditure/GDP Impacts 484.3 Expenditure Impacts on Suppliers 534.4 Employment and Incomes Supported by National Lottery 544.5 Exchequer Taxation Impacts 624.6 Summary of Key Findings 64

5 Wider Market Developments 655.1 Introduction 665.2 The Gambling Sector in Ireland 665.3 Lottery and Other Forms of Betting 675.4 Comparative International Analysis 765.5 Summary of Key Findings 79

Table 2.1 National Lottery Sales Revenue by Game – Total over Period 1987-2017

10

Table 2.2 National Lottery Sales Revenue by Game – 2017 11

Table 2.3 Main National Lottery Games – 2017 12

Table 2.4 National Lottery Games Available to Play Online 14

Table 2.5 National Lottery Online Sales (€m) – 2009-2017 14

Table 3.1 Total National Lottery Beneficiary Funding – 2006-2017 19

Table 3.2 Expenditure part-funded by the National Lottery by Category, 2017

20

Table 3.3 Impact of National Lottery Funding on Beneficiary Organisations 22

Table 3.4 National Lottery Retail Agents – Importance of Economic and Social Contributions of the National Lottery in Ireland Over the Past 15 Years

24

Table 3.5 Total National Lottery Prizes (€m) – 2007-2017 27

Table 3.6 Breakdown of National Lottery Prize Winnings by Game (%) – 2011-2017

28

Table 3.7 Lotto Prize Winnings over €1m (2015-2017) 30

Table 3.8 EuroMillions Prize Winnings over €1m (2016-2017) 30

Table 3.9 Breakdown of National Lottery Prize Winners by Prize Category and Game – 2017 (Number of Winners)

31

Table 3.10 Comparative Demographic Analysis – National Lottery Players v Population – 2017

32

Table 3.11 Comparative Demographic Analysis – Share of Spend on National Lottery Products

33

Tables, Figures & Boxes Page

ii

Table 3.12 National Lottery Participation by Social Class Indicator 33

Table 3.13 Number of National Lottery Retail Agents – 2006-2017 36

Table 3.14 National Lottery Commissions Paid to Retailers/Agents – 2006-2017 37

Table 3.15 Estimated Total Sales (Lottery and Non-Lottery) of National Lottery Retail Agents – 2017

37

Table 3.16 Estimated Impact on Retail Agents from Non-Lottery Related Retail Sales – 2017

38

Table 3.17 Estimated Employment and Incomes Supported Through Non-Lottery Related Retail Sales – 2017

38

Table 3.18 Summary of Estimated Impacts of National Lottery on Retail Agents – 2017

39

Table 3.19 National Lottery Retail Agents by Region – 2017 39

Table 3.20 National Lottery Revenue at Retail Agents by Region – 2017 40

Table 3.21 National Lottery Retail Agents – Estimated Total Retail Sales at National Lottery Retail Agents

41

Table 3.22 National Lottery Retail Agents – Perceived Estimate of the Extent to Which the Availability Of National Lottery Products Contributes To Additional, Non-Lottery Related Sales

42

Table 3.23 Direct Employment Supported by Non-Lottery Related Sales at Retail Agents (FTEs) – 2017

43

Table 3.24 Direct Incomes Supported by Non-Lottery Related Sales at Retail Agents (FTEs) – 2017

44

Table 4.1 Consumer Expenditure on National Lottery Products (€m) – 2012-2017

48

Table 4.2 Economy-Wide Impacts of Consumer Expenditure on Lottery Products (€m) – 2012-2017

49



iii

Table 4.3 Scenarios for Consumer Spending Impact of National Lottery Prize Winnings – Indicative Assumptions re % of Prizes Spent by Size Category of Winnings – Estimated 2017 Impact

50

Table 4.4 Scenario of Estimated Economic Impact of Spending of National Lottery Prize Winnings (€m) – 2017

51

Table 4.5 Estimated Direct, Indirect and Induced Economic Impact of Expenditure on Non-Lottery Related Retail Sales at Retail Agents (€m) – 2017

51

Table 4.6 Overall Direct, Indirect and Induced Impact of Consumer Spending on Lottery and Non-Lottery Products (€m) – 2017

52

Table 4.7 Estimated Direct, Indirect and Induced Economic Impact of Expenditure on Non-Lottery Related Retail Sales at Retail Agents (€m) – 2017

53

Table 4.8 Sub-Supplier Expenditure Impacts of National Lottery Beneficiary Funding (€m) – 2017

53

Table 4.9 Direct, Indirect and Induced Employment Supported by Premier Lotteries Ireland (FTEs) – 2017

54

Table 4.10 Direct, Indirect and Induced Impact of Premier Lotteries Ireland Expenditure on Incomes (€m) – 2017

55

Table 4.11 Direct, Indirect and Induced Employment Supported by National Lottery Retail Agents’ Commissions (FTEs) – 2017

55

Table 4.12 Direct, Indirect and Induced Employment Supported by Non-Lottery Related Sales at Retail Agents (FTEs) – 2017

56

Table 4.13 Direct, Indirect and Induced Employment Incomes Supported by National Lottery Sales at Retail Agents (€m) – 2017

56

Table 4.14 Direct, Indirect and Induced Employment Incomes Supported by Non-Lottery Related Sales at Retail Agents (€m) – 2017

57

Table 4.15 Direct, Indirect and Induced Employment Supported by National Lottery Beneficiary Funding (FTEs) – 2017

57


iv

Table 4.16 Direct, Indirect and Induced Employment Incomes Supported by National Lottery Beneficiary Funding (€m) – 2017

58

Table 4.17 Direct, Indirect and Induced Employment Supported by Spending of Prize Winnings (FTEs) – 2017

58

Table 4.18 Direct, Indirect and Induced Employment Incomes Supported by Spending of Prize Winnings (€m) – 2017

59

Table 4.19 Breakdown of Overall Employment Supported by the National Lottery (FTEs) – 2017

60

Table 4.20 Estimated Direct, Indirect and Induced Income Impacts Supported by National Lottery (€m) – 2017

61

Table 4.21 Estimated Taxation Paid to the Exchequer by National Lottery Employees 2017 – (€)

62

Table 4.22 Estimated Taxation Paid to the Exchequer by National Lottery Beneficiary Funding 2017 – (€)

62

Table 4.23 Estimated Taxation Paid to the Exchequer by Retail Agent Employees 2017 – (€)

63

Table 4.24 Estimated Taxation Paid to the Exchequer by Retail Agent Employees Supported by Non-National Lottery Sales in 2017 – (€)

63

Table 4.25 Estimated Taxation Paid to the Exchequer by Employees Supported by the Respending of National Lottery Prize Winnings – (€)

64

Table 4.26 Estimated Exchequer Impacts Supported by National Lottery (€m) – 2017

64

Table 5.1 Revenue Commissioner Data on Betting Receipts (€ Million) – 2011-2016

66

Table 5.2 Indicative Estimate of Size of Gambling Sector in Ireland – 2016 67

Table 5.3 Awareness of the Concept of Bet-On-Lottery Websites 71



v

Table 5.4 Awareness of Bet-On-Lottery Websites in Ireland 71

Table 5.5 Users of Bet-On-Lottery Websites in Ireland 73

Table 5.6 EuroMillions Sales Per Capita – € (2015-2016) 76

Table 5.7 Number of Residents per Retailer 77

Table 5.8 Per Capita Total Sales 77

Table 5.9 Per Capita Lottery Sales 78

Table 5.10 Per Capita Scratch Card Sales 78

Table 5.11 Sales Per Capita (2015-2016) (Countries/States with Pop Between 3-5 Million)

79

Figure 1.1 Overview of Indecon’s Methodological Approach to Assessment 03

Figure 1.2 Framework Used to Assess Economic and Social Impacts of National Lottery

05

Figure 2.1 Development of National Lottery Sales – Overall Sales, € Million 08

Figure 2.2 Timeline of National Lottery Products 09

Figure 2.3 National Lottery Products – % of Sales by Game – 1990 vs. 2017 13

Figure 2.4 National Lottery Online Sales (€m) – 2009 – 2017 15

Figure 3.1 Breakdown of Total Public Expenditure on Activities which are Part-funded by the National Lottery – 2017 – %

21

Figure 3.2 National Lottery Funding Beneficiaries – Perceived Significance of Economic and Social Contribution of the National Lottery in Ireland over the Past 15 Years

23

Figure 3.3 Historical Development of National Lottery Prize Winnings (1987-2017)

25


vi

Figure 3.4 Prize Winnings as % National Lottery Sales – 1987-2017 26

Figure 3.5 Breakdown of National Lottery Prize Pay-Out by Game – 2017 – % 29

Figure 3.6 Weekly Retail Sales (DBC & SC) and Number of Authorised Agents, 2014-2017

34

Figure 3.7 National Lottery Sales Per Retail Agent Excl. Select Agents (Draw Based Games v Scratch Cards)

35

Figure 4.1 Components of Macro-Economic Impacts of the National Lottery 46

Figure 4.2 Composition of National Lottery Net Consumption Impact on GDP 47

Figure 5.1 Frequency of Gambling (UK) – 2013-2016 68

Figure 5.2 Type of Gambling Activity (UK – In Person) – 2016 69

Figure 5.3 Type of Gambling Activity (UK – Online) – 2016 70

Figure 5.4 Awareness of National Lottery Competitor 1 (Aug 2016-May 2017) 72

Figure 5.5 Percentage of Those Aware of Competitor who have Played a Game on Competitor’s Website (Nov 2016-May 2017)

74



vii

Executive Summaryviii

Glossary of Terms and Abbreviations

Good Causes An organisation in receipt of National Lottery Good Causes funding.

Consumer Surplus This is the difference between what a consumer is willing to pay for a good or service and what they actually pay for the good or service.

CSO Central Statistics Office

DBG Draw Based Games

FTE Full-Time Equivalent – The unit which indicates the time worked by one employee on a full-time basis. It is used to convert the hours worked by part-time employees into the hours worked by full-time employees.

GDP Gross Domestic Product

Indirect Effects Indirect impacts include the knock-on business activity that is supported through direct economic activity, e.g., the positive economic impacts of upstream suppliers.

Induced Effects Induced effects are concerned with the knock-on impact of household consumption due to direct economic activity. This will include the impact of additional employment wages directly supported by the National Lottery.

IWG Digital Instant Win Games

NLF National Lottery Fund

NUTS Nomenclature of Territorial Units for Statistics. A classification system for dividing up territory of countries in the EU for the purpose of socio-economic analyses of these regions. There are eight NUTS 3 level regions in Ireland, which is the level covered in this report.

Select Channel Select channel is a channel that utilises the infrastructure of a third party payment provider to deliver a limited range of National Lottery Services.

Core Agents Our core agents form the primary sales network that provide full range of National Lottery services using proprietary National Lottery telecommunications and terminal hardware.

Executive Summary

Introduction and key findingsThis independent assessment of the socio-economic impact and contribution of the National Lottery in Ireland was undertaken by Indecon International Research Economists on behalf of Premier Lotteries Ireland, operator of the National Lottery. The National Lottery was established in 1987 under the National Lottery Act 1986 with the purpose of raising funds to support Good Causes in the areas of youth, sports, recreation, health, arts, culture, national heritage and the Irish language.

The report examines the National Lottery’s impact in its contribution to GDP, employment and to Good Causes. A rigorous and empirical approach was used to assess the evidence based on Irish and international datasets; new primary research and econometric modelling.


ixExecutive Summary

Executive Summaryx

Macro-Economic Impacts

• The overall economy-wide impact of the National Lottery and non-National Lottery related consumer expenditure was €1.97 billion in 2017.

• The estimated gross annual exchequer impact was €101.3 million per annum in 2017 (excluding any returns to the Exchequer from its role as a shareholder in the National Lottery).

• It is estimated that the National Lottery directly supported 17,090 full-time equivalent jobs in 2017 across the Irish economy. This includes individuals employed within PLI, jobs supported through funding for Good Causes, employment supported through the spending of prize winnings, and jobs supported within the retail agent network.

When indirect and induced multiplier impacts are included, this impact rises to 21,728 jobs (see table on page 4). Direct incomes are estimated at €564.2 million, increasing to €802.9 million when multiplier impacts are added.

Key findings are outlined below:

overall economy-wide impact in 2017

per annum in 2017

with overall employment impact rising to 21,728

across the Irish economy

€1.97 billion in consumer expenditure

€101.3 million towards exchequer

17,090 jobs across Ireland

xi


Executive Summary

Breakdown of Overall Employment Supported by the National Lottery (FTEs) – 2017

Direct Employment Supported – FTEs

Indirect and Induced Employment*

Total Employment**

Employment in PLI/National Lottery

96 23 119

Employment supported by non-Lottery sales in retail agent network

9,192 2,240 11,433

Employment supported by retail agent commissions

709 173 882

Employment supported by National Lottery funding to Good Causes organisations

2,763 1,147 3,910

Employment supported by spending of National Lottery prize winnings

4,329 1,055 5,383

Total Employment Impact 17,090 4,638 21,728

Source: Indecon analysis* Indirect and Induced Employment: Multiplier Impacts – Additional Indirect and Induced Employment

Supported across Irish Economy – FTEs** Total Employment: Supported Across Irish Economy (incl. Multiplier Impacts) – FTEs

Executive Summaryxii

from 1987 to the end of 2017

€5.1 billion raised for Good Causes

by National Lottery participants in 2017

an estimated €620,000 was raised every day

Impact of National Lottery Funding on Good Causes organisations

• More than €5.1 billion has been raised for Good Causes between the establishment of the National Lottery in 1987 and the end of 2017. The total sum raised for Good Causes in 2017 was €226.3 million.

• It is estimated that 2,763 full-time equivalent jobs were supported in Good Causes beneficiary organisations in 2017. This increases to 3,910 jobs when multiplier impacts are included.

• The number of volunteers in organisations supported by National Lottery funding is estimated at 177,000. Total number of hours volunteered in 2017 is estimated to have an economic value amounting to €79.7 million.

• A high percentage of Good Causes state that the National Lottery has made a “very significant” or “significant” contribution to youth and recreation activities and organisations.

¤The estimated number of

volunteers in organisations supported by National Lottery

Good Causes funding

177,000 volunteers in organisations

xiii


Executive Summary

Impact of National Lottery on Retailers

• Direct employment within National Lottery retail agents supported by sales of non-Lottery products, added to employment supported by the retail agent commissions, was estimated to be 9,902 full-time equivalent jobs in 2017.

• Retail agents’ commissions combined with the sale of non-National Lottery products in shops which are National Lottery agents was estimated at €609 million in 2017.

Wider Market Developments

• There has been a rise in online gaming and the growth in competitors offering bets on lottery games.

• Indecon estimates that the total size of the betting and lotteries sector in Ireland was €5.6 billion. National Lottery’s sales represented 13% of this market.

• One of the key differences between the National Lottery and its competitors is that the National Lottery is mandated to raise funds for Good Causes. Approximately 91% of revenue generated by the National Lottery is returned to the community in prizes, retail commissions and Good Causes.

Non-National Lottery sales at retail agents supported

by the presence of National Lottery in 2017

National Lottery’s sales represented 13% of this market in 2017

€5.6 billion size of betting and lottery sector

in the form of prize winnings, funding for Good Causes and

retailer commissions

91% of generated revenue goes back into the community

€609 million sales at retail agents

13%

91%

Executive Summaryxiv

€53

€47

€69

€98

€104 €1

13 €122

€128

€128 €1

36

€141 €1

59

€163 €1

76

€173 €1

91

€187 €2

03 €218

€245

€268

€263

€244

€232

€226

€188

€213

€206

Micro-economic and social impacts

Indecon has assessed a number of aspects of the micro-economic and social impacts of the National Lottery. The results indicate that the National Lottery has provided a total of over €5.1 billion in funding for Good Causes between 1987 and 2017. This is equivalent to almost one-third of consumer spend on lottery products.

It is estimated that almost €8.8 billion has been returned to the community through National Lottery prize winnings between 1987 and the end of 2017, representing over half (53.5%) of the National Lottery revenue over that period. In 2017, a total of €452 million was paid out in prizes, or 56.5% of sales.

Almost

€8.8 billionhas been returned to

the community through National Lottery prize

winnings between 1987 and the end of 2017

Source: Indecon analysis of data provided by PLI/National Lottery

Historical Development in National Lottery Funding for Good Causes (1987-2017)Annual Funding (€ Million)

€5.17bn

Cumulative Funding (€ Billion)

€300

€250

€200

€150

€100

€50

€0

€6.0

€5.0

€4.0

€3.0

€2.0

€1.0

€0.0

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

€56

Annual Good Causes Funding Cumulative Funding

€225

€195

xv


Executive Summary

Estimated Economic Impacts of National Lottery on Retail Agent Network

2017

Retail Agent Commissions (€m) €47.0 m

Non-lottery sales supported by presence of National Lottery agency (€m)

€609.0 m

Employment supported within National Lottery retail agent network*

9,902 FTEs

Source: Indecon analysis and modelling

* Includes Direct employment within National Lottery retail agents supported by sales of non-Lottery products, in addition to employment supported by the retail agent commissions

The income of National Lottery retail agents around the country is boosted with retail commissions and non-lottery sales. Because of high opportunity and displacement costs, these gains are likely to be at a cost to non-Lottery retailers. National Lottery funding may, however, help smaller retailers and post offices to remain economically viable.

Executive Summaryxvi

Contribution of lottery funding to Good CausesOur survey of Good Causes organisations demonstrates that recipients of National Lottery funding believe it has made a very significant or significant economic and social contribution to youth and recreation activities, sporting activities, local communities, and arts, culture and heritage (see table below).

Provision of funding for social enterprises

Support for Irish language activities and organisations

Provision for funding for charitable organisations

Provision for funding for community health and welfare facilities in Ireland

Contribution to exchequer taxation

42.1%

44.4%

48.6%

55%

68.9%

75%

76.3%

78%

82.1%

Support for local Communities

Support for arts, culture and heritage organisations and activites

Provision for funding for sporting activities and organisations

Provision for funding for youth and recreation activities and organisations

Source: Indecon analysis

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

xvii


Executive Summary

The economic value of volunteering activity

in Good Causes beneficiary organisations is estimated

at over

€79.7 million

per annum

Research shows that Good Causes beneficiaries considered that National Lottery funding has made a “very significant” or “significant” economic and social contribution, especially in the areas of youth and recreation, sport, local communities, arts, culture and heritage.

Empirical evidence from the survey of Good Causes organisations and published accounts suggests that on average 13% of overall funding came from the National Lottery Good Causes Fund, up to 90% in some cases. 2,763 full-time equivalent jobs are supported in Good Causes beneficiary organisations which have over 177,000 volunteers. The economic value is estimated at over €79.7 million per annum.

Employment and volunteering activity in Good Causes organisations indicate that 2,763 full-time equivalent jobs are supported by National Lottery funding. These organisations have over 177,000 volunteers and the economic value is estimated at over €79.7 million per annum.

Impact of National Lottery Funding on Good Causes organisations

Lottery funding as % of total organisation funding base 13.05%

Estimated Total Employment in Good Causes organisations which is directly supported by National Lottery Funding (FTEs)

2,763

Estimated Total Number of Volunteers in Good Causes organisations (Persons)

177,293

Estimated Total Annual Volunteer Hours 8,615,273

Estimated Total Economic Value of Volunteering in Good Causes organisations

€79.7 million

Source: Indecon analysis based on research among selected National Lottery funding Good Causes organisations, survey of Good Causes organisations and data from CSO

On average

13% of overall Good Causes

beneficiaries funding was provided by the National

Lottery

Executive Summaryxviii

National Lottery Retail Agents – Importance of Economic and Social Contributions of the National Lottery in Ireland Over the Past 15 Years

Very Important

Important Neither Important Nor

Unimportant

Unimportant Very Unimportant

Support for health and welfare facilities in Ireland

33.5% 43.5% 17.4% 4.3% 1.3%

Support for sporting activities and organisations

47.8% 44.3% 5.2% 1.3% 1.3%

Support for children/youth and recreation activities and organisations

39.3% 49.8% 8.3% 1.3% 1.3%

Support for arts, culture and heritage organisations and activities

27.3% 48.9% 19.0% 2.6% 2.2%

Support for Irish language activities and organisations

19.9% 35.1% 31.2% 10.4% 3.5%

Support for charitable organisations 34.6% 44.7% 15.4% 3.9% 1.3%

Support for local communities 43.0% 43.9% 7.8% 3.5% 1.7%

Support for social enterprises 23.2% 42.5% 25.0% 6.1% 3.1%

Contribution to exchequer taxation 22.4% 29.8% 33.3% 7.0% 7.5%

Source: Survey of National Lottery Retailers

Contribution of lottery funding to Good Causes organisations contd.

xix


Executive Summary

Macro-economic impactsIn assessing the wider, macro-economic impacts of the National Lottery, Indecon examined the:

• employment and employment incomes and associated consumer expenditure; and,

• contribution to the Exchequer from income tax as a result of this employment.

Significant funding for sporting activities, children

and youth recreation and wider impact on local

communities

Almost €8.8 billion was been returned to the community through

National Lottery prize winnings between 1987

and the end of 2017

¤

Executive Summaryxx

Summary of Components of Overall Economic Impact of National LotteryThe overall economic impact of the National Lottery in 2017 are summarised in the table on page 14. Overall GDP impact of lottery spending is estimated to be €1.973 billion, and tax to the exchequer of €101.3 million (excluding any returns to the Exchequer from its role as a shareholder in the National Lottery). Estimates are based on conservative assumptions and recognise that all economic sectors have inter-relationships with other parts of the economy.

overall GDP impact of lottery spending in 2017

estimated

€1.973 billion

per annum in 2017

€101.3 million towards exchequer

National Lottery funding for Good Causes in 2017

€226.3 million

¤

xxi


Executive Summary

Wider market developmentsThe National Lottery operates in a dynamic market environment which has undergone significant change over the past four years. Analysis shows a rise in online gaming and growth in bet-on-lottery operators, where players can bet on the outcomes of national lotteries without purchasing a ticket. It is estimated that the total size of the betting and lotteries sector in Ireland amounted to approximately €5.6 billion in 2016. National Lottery’s sales represented 13% of this market. 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.

Summary of Overall Gross Economic Impacts of National Lottery on Irish Economy – 2017

Component of Impact Direct Impact

Multiplier Impacts

Economy-wide Impacts

Expenditure Impact on GDP

Expenditure Contribution to GDP – € Million1 1,243.9 729.2 1,973.1

Expenditure Impacts on Suppliers National Lottery Non-Labour Expenditures – Estimated Expenditure Impacts on Suppliers throughout Economy – € Million

48.8

27.0

75.8

Impacts on National Lottery Retail Agents

National Lottery agent commissions – € Million 47.0 27.6 74.6

Estimated value of additional non-Lottery sales supported – € Million

609.0 357.0 966.0

Impacts on National Lottery Good Causes

Economic Impact of National Lottery funding for Good Causes – € Million

226.3 144.7 371.0

Employment and Employment Incomes Supported

Estimated Employment Supported – FTEs2 17,090 4,638 21,728

Estimated Employment Incomes Supported – € Million2 564.2 238.8 802.9

Consumer Welfare Impact

Estimated Consumer Surplus – € Million3 11.4 - -

Exchequer Taxation Impact

Estimated Tax Contribution – € Million4 101.3 - -

Source: Indecon analysis and modelling1 Total Consumer Expenditure impacts include direct/gross impacts (lottery sales less prizes), estimated spending of prizes (based

on Indecon’s central estimate), and additional non-Lottery sales by retail agents. Impacts do not take account of any displacement of other expenditure in the economy.

2 Includes employment and associated incomes within Premier Lotteries Ireland, employment and incomes supported through National Lottery funding received by Good Causes organisations, employment and incomes supported within the retail agent network, and employment and incomes supported through the spending of prize winnings.

3 Estimated via Indecon econometric modelling (see Section 4.5)4 Taxation contribution refers to taxation paid on employment incomes supported through the employment impacts identified above.

The total size of the betting and lotteries

sector in Ireland amounted to approximately

€5.6 billion in 2016

Executive Summaryxxii

Conclusion

This report shows that the National Lottery has had a significant impact on the Irish economy, including contributing to GDP and employment. This is evident from the independent estimates presented. In addition a key social impact of the National Lottery has been the provision of funds.

1 Introduction and Methodology


1 Introduction and Methodology2

1 Introduction and Methodology1.1 Introduction

This independent assessment of the socio-economic impact and contribution of the National Lottery in Ireland was undertaken by Indecon Research Economists on behalf of Premier Lotteries Ireland DAC (operators of the National Lottery). The National Lottery was established in 1987 under the National Lottery Act 1986 for the benefit of Good Causes. Since its launch 31 years ago (in 1987), the National Lottery has raised more than €5.3 billion for Good Causes in the areas of youth, sport, recreation, amenities, health, welfare, arts, culture, national heritage and the Irish language.

Initially operated by An Post, the Government (under the National Lottery Act 2013) launched a competitive tender process to operate the National Lottery. In November 2014 a 20-year licence to run the National Lottery was awarded to Premier Lotteries Ireland (PLI).

This report examines a number of key aspects of the National Lottery including:

• The micro-economic and social impacts; • The macro-economic impacts of the lottery on the Irish economy, including

its contribution to Gross Domestic Product (GDP), employment and its impacts on suppliers;

• Exchequer impacts from additional taxation and the estimated value of consumer surplus.

1.2 Methodological Approach

A schematic description of the rigorous methodology used is presented below (Figure 1.1)

3



Figure 1.1: Overview of Indecon’s Methodological Approach to Assessment

Phase 1: Project Inception; data assembly and primary research

Phase 2: Detailed analysis, modelling and assessment

Phase 3: Conclusions and report preparation

1.1: Project inception 2.1: Analysis of PLI/National Lottery Datasets

3.1: Integrate assessment and formulate conclusions

1.2: Review of previous assessments and market research

2.2: Analysis of responses to survey research and integration into impact assessment modelling

3.2: Prepare and issue detailed assessment report

1.3: Collation of detailed historical National Lottery/PLI data

2.3: Estimation of macro-economic direct and multiplier

impacts of National Lottery using Indecon’s model of Irish economy

1.4: Collation of CSO and Revenue data

2.4: Estimate Exchequer taxation impacts

1.5: Collation of international comparative data

2.5: Estimate consumer Value (Willingness to pay/consumer

surplus) of National Lottery

1.6: Design and fieldwork for primary/survey research – survey of National Lottery retail agents and survey of National Lottery

funding beneficiaries

2.6: Analysis of micro-economic and social impacts, incl. re

consumer spend, funding for good causes and prize winnings

1.7: Assessment of historical development of National

Lottery, incl. analysis of product development, sales, funding for good causes and prize winnings

2.7: Review of gaming market developments, incl. comparative

international analysis

Source: Indecon


1.2.1 Framework for assessment of impacts

This assessment builds on Indecon’s previous research into the impact of the National Lottery and examines a diverse set of economic and social impacts associated with the National Lottery. A schematic description of the conceptual framework was applied in completing the assessment is set out in the figure below (Figure 1.2).

5



Figure 1.2: Framework Used to Assess Economic and Social Impacts of National Lottery

National Lottery Company

Direct Consumer Expenditure Impact

(Lottery Sales less Prizes Paid Out

Lottery Consumer Expenditure

Impact on GDPPrize Winners Prize Winnings

Impact of Re-Expenditure

of Prize Winnings

Lottery Retail AgentsAdditional

Non-Lottery Sales within Retail Agents


National Lottery Company Expenditures

Expenditures on Sub-Supply Inputs

Expenditure Impacts on Sub-SuppliersRetail Agents

Lottery Funding Beneficiaries

Funding for Good Causes Prize Winnings


Employment and Incomes Supported

and Exchequer Taxation Contribution

Employment and Incomes Supported

and Taxation ImpactsRetail Agents

Lottery Funding Beneficiaries

Multiplier Impacts

(a) Consumer Expenditure (b) Expenditure on Sub-Suppliers

(c) Employment and Incomes

Consumer Value/Consumer Surplus Economy-wide Impacts of National Lottery

Source: Indecon


This detailed assessment uses data from a wide range of sources:

• Detailed financial data on National Lottery provided by Premier Lotteries Ireland, including: • Lottery sales data by product/game by County;• Good Causes funding data;• Prize winnings by game and amount;• National Lottery retail agents, number by County;• Lottery online sales;• Product development and innovations.

• Market research, including tracking surveys on National Lottery players;• Comparative international data, including data from La Fleurs World Lottery Almanac,

the UK Gambling Commission, and Company Service aux Lotteries en Europe (SLE); • Department of Public Expenditure and Reform, Revised Estimates (various years);• Revenue Commissioners data on receipts from betting taxation;• Central Statistics Office (CSO) datasets, including Quarterly National Household

Survey (QNHS) and Household Budget Survey.

This assessment was supported by extensive new primary research, including:

• Survey of National Lottery retail agents; • Survey of National Lottery Good Causes beneficiary organisations.

This research was used to achieve a deeper understanding of the economic and social impacts of the National Lottery and to inform the analysis. Qualitative inputs were obtained from organisations in receipt of funding for Good Causes, and the implications for National lottery retailers was assessed.

1.3 Report Structure

The remainder of this report is structured as follows:

• Section 2 contains a discussion of the development of the National Lottery;• Section 3 assesses the micro-economic and social impacts of the National Lottery;• Section 4 examines the macro-economic impacts of the lottery on Irish economy

as a whole; • Section 5 presents an overview of under market developments.

1.4 Acknowledgements and Disclaimer

Indecon would like to express our gratitude to management and staff at Premier Lotteries Ireland, including Dermot Griffin, Miriam Donohoe, Carol-Anne Bergin, Dorothy Donohoe, Robert Magee, George Canavan, Sile Rooney, Jenny Fisher and Maurice Nolan, for their valuable assistance throughout the process of completing this study.

Particular thanks are due to organisations that received National Lottery funding and National Lottery retail agents who provided valuable inputs.

The usual disclaimer applies and the analysis and findings in this independent report are the sole responsibility of Indecon Research Economists.

2 Development of National Lottery in Ireland


2 Development of National Lottery in Ireland8


This section contains an overview of the National Lottery, focusing on developments since its establishment in 1987.

2.1 Trends in Lottery Sales

Total National Lottery Sales since its inception in 1987 are shown below (Figure 2.1). There was a steady increase in sales between 1987 and 2008. However, sales fell from a peak of €840 million in 2008 to €670 million in 2015. This is likely to reflect the economic recession as well as developments in the market environment, including the growth in alternative forms of gaming and of substitute products. There was a return to growth in 2016 with sales of €750 million recorded. Sales in 2017 reached over €800 million for the first time since 2009.

Figure 2.1: Development of National Lottery Sales – € Million

130.0140.2

178.3214.0

300.3320.4

344.4370.0

385.0390.9

411.8427.6

479.2495.4

538.1533.1

559.2578.3

616.4679.1

778.5840.1

815.1772.0

761.4735.1

685.2687.7

670.4750.2

800.2

0 100 200 300 400 500 600 700 800 900

Total National Lottery Sales (€ Million)

1987

1988

1989

1990

2017

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




2.2 Innovation and Product Development

The chart below shows how the product offering of the National Lottery has developed since its establishment in 1987 (Figure 2.2). The first products offered were scratch cards, followed by the Lotto in 1988. The next game launched in 1997 was Lotto 5-4-3-2-1, with Telly Bingo and Lotto Plus introduced over the following years. Phone Play (which was part of Winning Streak) started in 2003 but was discontinued in 2007. EuroMillions was introduced in 2004, followed by EuroMillions Plus in 2007. New games offered in 2008 and 2009 were: Monday Million, the Millionaire Raffle, All or Nothing. Online play was also introduced in 2009. Monday Million (as well as Monday Million Plus) and All or Nothing were discontinued after 2012. Daily Millions and Daily Millions Plus commenced in 2012 and remain part of the National Lottery’s offering. The development of these games over the last two decades highlights the product innovation implemented by the National Lottery.

Figure 2.2: Timeline of National Lottery Products

1987

1988

1989

199

019

9119

9219

9319

9419

9519

9619

9719

9819

9920

00

2001

2002

2003

200

420

0520

06

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Daily Millions Plus

Daily Millions

Monday Million Plus

Digital Channel

All or Nothing

Millionaire Raffle

Monday Million

EuroMillions Plus

EuroMillions

Phone Play

Lotto Plus

Telly Bingo

Lotto 5-4-3-2-1

Lotto

Scratch Cards (Instant Win)



Almost half of National Lottery sales since 1987 have been from the Lotto game amounting to €7.5 billion between 1987 and 2017. The next highest sales are from Scratch Cards (27.7%), EuroMillions (9.6%) and Lotto Plus (8.6%) (Table 2.1).

Table 2.1: National Lottery Sales Revenue by Game – 1987-2017

Game €m % of Total

Lotto 7,549.2 46.1%

Scratch Cards 4,537.9 27.7%

EuroMillions 1,575.7 9.6%

Lotto Plus 1,411.7 8.6%

EuroMillions Plus 437.2 2.7%

TellyBingo 306.5 1.9%

Lotto 54321 243.1 1.5%

Raffle 98.8 0.6%

Monday Million 70.4 0.4%

Daily Millions 63.0 0.4%

Daily Millions Plus 26.4 0.2%

All or Nothing 25.2 0.2%

Digital Instant Win Games 24.3 0.1%

Monday Million Plus 12.6 0.1%

Phone Play 5.3 0.0%

Total 16,387.5 100%

Source: Indecon analysis of National Lottery data



Scratch Cards were the biggest contributor in terms of revenue to the National Lottery in 2017, accounting for 28.9% of sales (Table 2.2). This is followed by Lotto (28.6%) and EuroMillions, which accounted for 21.7%.

Table 2.2: National Lottery Sales Revenue by Game – 2017

Game Sales Revenue (€m) Percentage of Total

Scratch Cards 231.3 28.9%

Lotto 228.9 28.6%

EuroMillions 173.9 21.7%

EuroMillions Plus 55.2 6.9%

Lotto Plus 52.7 6.6%

TellyBingo 15.9 2.0%

Lotto 54321 10.8 1.3%

Digital Instant Win Games 10.1 1.3%

Raffle 9 1.1%

Daily Millions 8.6 1.1%

Daily Millions Plus 3.8 0.5%

Total 800.2 100%



The main games in the National Lottery's portfolio, as of 2017 are as follow:

Table 2.3: Main National Lottery Games – 2017

Games

Scratch Cards

Lotto

Lotto Plus

Lotto 5-4-3-2-1

Telly Bingo

EuroMillions

EuroMillions Plus

Millionaire Raffle

Digital Instant Win Games

Daily Millions

Daily Millions Plus




The significance of product innovation can be seen by comparing the percentage of sales by game in 2017 compared to 1990. Scratch Cards and Lotto accounted for under 30% of sales in 2017.

Figure 2.3: % of Sales by Game – 1990 vs. 2017

Lotto65%

EuroMillions22%

2.3

EuroMillions Plus7%

Raffle 1%


Daily Million Plus0%

Daily Million 1%

Digital IWG1%

Lotto29%

Lotto Plus7%

Lotto 543211%

TellyBingo2%

Scratch Cards35%

Instant WinScratch Cards29%

1990 2017



The majority of games offered by the National Lottery are available to play online (Table 2.4). There are 27 different instant win games on the National Lottery website.

Table 2.4: National Lottery Games Available to Play Online

Games

27 Instant Win Games*

Lotto and Lotto Plus

EuroMillions and EuroMillions Plus

Daily Million and Daily Million Plus

Source: Indecon analysis of data provided by PLI/National Lottery Website as of 12 September 2018

Note: *Instant win games include: Digital Instant €100, Digital Instant €300, Digital Instant €500, Digital Instant €1,000, 20K Bingo, Magic Multiplier 20x, Magic Multiplier 40x, Jewel 7s Doubler, Kick-Off Cash, King of Cash, 100 Grand, Cairo Cash, Instant Lotto, Mini Keno, Lucky 7s Doubler, 75 Bingo, All Cash Digital, All Cash Digital Gold, Stacks of Cash, Sunny Money, Winning Lines, Flaming Hot Numbers, Super 777, Flash Cash, Prize Ducks, Winning Gold and 50,000 Richer.

There has been growth in digital sales since they were introduced in 2009. Digital sales grew by 28% between 2016 and 2017 to reach 6.5% of total National Lottery sales (Table 2.5).

Table 2.5: National Lottery Online Sales (€m) – 2009-2017

2009 2010 2011 2012 2013 2014 2015 2016 2017

Total Lottery Sales 815.1 772.0 761.4 735.1 685.2 687.7 670.4 750.2 800.2

Online Sales 0.7 3.7 6.1 8.7 11.3 17.5 23.0 40.7 52.1

Annual % Growth in Online Sales - 429% 65% 43% 30% 55% 31% 77% 28%

Online as % of Total Sales 0.1% 0.5% 0.8% 1.2% 1.6% 2.5% 3.4% 5.4% 6.5%

Source: Analysis based National Lottery data



The growth in online sales reached €52.1 million in 2017, compared to €0.7 million in 2009 (Figure 2.4). Most of the sales were from draw-based games such as Lotto or EuroMillions.

Figure 2.4: National Lottery Digital Sales (€m) – 2009-2017

0 10 20 30 40 50 60

0.72009

3.72010

6.12011

8.72012

11.32013

17.52014

23.02015

40.72016

52.12017

Internet Sales (€ Million)

Source: Analysis based PLI/National Lottery data


2.3 Summary of Key Findings

The key findings of this section are summarized below:

• There was a steady increase in sales between 1987 and 2008. However, sales fell from a peak of €840 million in 2008 to €670 million in 2015. This in part is likely to reflect the economic recession as well as developments in the market environment, including the growth in alternative forms of gaming and of substitute products. National Lottery sales returned to growth in 2016 to €750 million, before reaching over €800 million in 2017.

• Since Premier Lotteries Ireland began operating the National Lottery in 2014 there have been a number of developments in the games available.

• The significance of product innovation can be seen by comparing the percentage of sales by game in 2017 compared to 1990. Scratch Cards/Instant Win Games and Lotto accounted for under 30% of sales in 2017.

3 Assessment of Micro-Economic and Social Impacts


3 Assessment of Micro-Economic and Social Impacts18


3.1 Introduction

This section examines three key areas:

• Funds for Good Causes beneficiaries;• Funds returned to the community via prize winnings; • The impact on National Lottery retail agents.

3.2 Funds for Good Causes beneficiaries

The National Lottery Fund (NLF) was set up under the National Lottery Act, with a portion of the revenue from the sales of National Lottery products being paid into the NLF. This fund supports activities in the following:1

• Sport and recreation;• National culture and heritage (including the Irish language);• The Arts (within the meaning of the Arts Act 2003);• Health of the community;• Youth, welfare and amenities;• Natural environment; and,• Such other objectives (if any) as the Government may determine from time to time.

The amount given in funding to beneficiaries is outlined in Table 3.1. Beneficiary funding in 2017 amounted to over €226 million.

1 National Lottery Act 2013, Op. Cit.



Table 3.1: Total National Lottery Funding for Good Causes – 2006-2017

Year € Million

2006 218.0

2007 245.5

2008 267.8

2009 263.5

2010 243.7

2011 231.9

2012 225.3

2013 205.9

2014 194.6

2015 188.0

2016 213.0

2017 226.3

Source: Analysis based on National Lottery data

Table 3.2 shows the estimated expenditure supported by National Lottery Good Causes funds.


Table 3.2: Expenditure Part-funded by the National Lottery 2017

2017 Estimated Outturn (€000’s) Current Capital Total

Housing, Planning, Community and Local Government

Communal Facilities in Housing Projects - 500 500

Private Housing Grants - 34,162 34,162

Sub-Total 0 34,662 34,662

Rural and Community Development

Seniors Alert Scheme 2,300 - 2,300

Supports for Community and Voluntary Sector – National Organisations Funding

5,921 - 5,921

Local/Regional Development Supports 600 - 600

Society of St Vincent de Paul and Protestant Aid 1,500 - 1,500

Sub-Total 10,321 0 10,321

Transport, Tourism and Sport

Grants for Sporting Bodies and the Provision of Sports and Recreational Facilities

- 43,975 43,975

Sports Ireland 49,835 2,900 52,735

Sub-Total 49,835 46,875 96,710

Arts, Heritage and the Gaeltacht

An Chomhairle Ealaíon/Arts Council (Grant-in-Aid) 65,057 93 65,150

Grant for An Chomhairle Oidhreachta (Heritage Council) 3,566 2,688 6,254

Irish Language Support Schemes 3,700 95 3,795

Sub-Total 72,323 2,876 75,199

Health

Health Ireland Fund 5,000 - 5,000

Health Agencies and Other Similar Organisations 7,513 - 7,513

Building, Equipping and Furnishing of Health Facilities - 2,539 2,539

Sub-Total 12,513 2,539 15,052

Children and Youth Affairs

Youth Organisations and Services 57,336 3,000 60,336

Sub-Total 57,336 3,000 60,336

Total 202,328 89,952 292,280

Source: 2018 Revised Estimates for Public Services



Funding for Transport, Tourism and Sport was one of the most important expenditure areas, part funded by the National Lottery by 33%. This is followed by Arts, Heritage and the Gaeltacht (26%), and Children and Youth Affairs (Figure 3.1).

Figure 3.1: Breakdown of Total Public Expenditure on Activities which are Part-funded by the National Lottery – 2017 – %

Housing, Planning,Community and LocalGovernment 12%

Rural and CommunityDevelopment 3%Health 5%

Children and Youth Affairs 21%

Arts, Heritage and the Gaeltacht 26%

Transport, Tourismand Sport 33%

Source: Indecon analysis of 2018 Revised Estimates for Public Service Expenditure

3.3 Impact of Good Causes funding

An important impact of National Lottery Good Causes funding is the employment it supports directly in beneficiary organisations. Estimates suggest that 2,763 full-time equivalent jobs (FTEs) were supported directly through National Lottery funding in 2017. (These organisations are estimated to have 15,285 full-time equivalent employees in total). Estimates based on this report’s modelling indicate that approximately €104 million in employment incomes are supported directly through the contribution made by National Lottery funding to these organisations. In addition, there are over 177,000 volunteers working in Good Causes organisations. The value to the economy of this volunteering is estimated at over €79.7 million per annum (Table 3.3).


Table 3.3: Impact of National Lottery Funding on Good Causes Organisations

Lottery funding as % of total organisation funding base 13.05%

Estimated Total Employment in Beneficiary Organisations which is directly supported by National Lottery Funding (FTEs)

2,763

Estimated Total Incomes associated with Employment in Beneficiary Organisations directly supported by National Lottery Funding

€104 million

Estimated Total Number of Volunteers in Beneficiary Organisations (Persons)

177,293

Estimated Total Annual Volunteer Hours 8,615,273

Estimated Total Economic Value of Volunteering in Beneficiary Organisations

€79.7 million

Source: Indecon analysis based on research among selected National Lottery funding Good Causes organisations, survey of Good Causes organisations and data from CSO

Good Causes beneficiary organisations surveyed for this report stated that National Lottery funding has had a “very significant” or “significant” contribution on Irish life over the last 15 years (Figure 3.2). 82.1% of Good Causes organisations felt funding for youth and recreation activities and organisations had a “very significant” or “significant” impact. Similarly high levels were reported for sporting activities and organisations, local communities, and arts, culture and heritage activities.



Figure 3.2: National Lottery Good Causes Beneficiaries – Perceived Socio-economic Impact of the National Lottery in Ireland over the Past 15 Years

0 10 20 30 40 50 60 70 80 90 100

Provision of funding for Youth and Recreation Activities and Organisations

Provision of funding for Sporting Activities and Organisations

Support for Arts, Culture and Heritage Organisations and Activities

Support for Local Communities

Provision for funding for Community Health and Welfare facilities in Ireland

Provision for funding for Charitable Organisations

Support for Irish Language Activities and Organisations

Contribution to Exchequer Taxation

Provision of funding for Social Enterprises

82.1%

78.0%

76.3%

75.0%

68.9%

55.0%

48.6%

44.4%

42.1%

Source: Indecon Confidential Survey of National Lottery Funding Beneficiaries


A surveys of retail agents found:

• 92.1% believed National Lottery funding had a “very” or “important” impact on support for sporting activities and organisations.

• Support for children/youth organisations was also viewed as important.• 86.9% suggested National Lottery funding had a very important or important

impact on local communities.

Table 3.4: National Lottery Retail Agents – Importance of Socio-Economic Impact of the National Lottery in Ireland Over the Past 15 Years

Very Important

Important Neither Important

Nor Unimportant

Unimportant Very Unimportant

Support for Health and Welfare facilities in Ireland

33.5% 43.5% 17.4% 4.3% 1.3%

Support for Sporting Activities and Organisations

47.8% 44.3% 5.2% 1.3% 1.3%

Support for Children/Youth and Recreation Activities and Organisations

39.3% 49.8% 8.3% 1.3% 1.3%

Support for Arts, Culture and Heritage Organisations and Activities

27.3% 48.9% 19.0% 2.6% 2.2%

Support for Irish Language Activities and Organisations

19.9% 35.1% 31.2% 10.4% 3.5%

Support for Charitable organisations

34.6% 44.7% 15.4% 3.9% 1.3%

Support for Local Communities

43.0% 43.9% 7.8% 3.5% 1.7%

Support for Social Enterprises

23.2% 42.5% 25.0% 6.1% 3.1%

Contribution to Exchequer Taxation

22.4% 29.8% 33.3% 7.0% 7.5%

Source: Confidential Survey of National Lottery Retailers



3.4 Funds returned to the community

Between 1987 to 2017 the National Lottery returned almost €8.8 billion in prizes to the community ( Figure 3.3).

Figure 3.3: National Lottery Prize Payouts 1987-2017

€0 €50 €100 €150 €200 €250 €300 €350 €400 €450 €500

1987

€65€55

1988

€871989

€1071990

€153€164

€176€189

€197€201

€213€220

€248€259

€282€281

€294€305

€325€362

€421€455

€438€420€423

€406€383€389

€381€422

€4522017

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

€0 €1 €2 €3 €4 €5 €6 €7 €8 €9 €10Cumulative Prizes Paid (€ Billion)

Annual Prizes Paid Cumulative Prizes Paid

Annual Prizes Paid (€ Million)



The proportion of National Lottery sales returned to the community in prizes has increased significantly over time. Total prizes paid in 2017 represented 56.5% of overall sales (Figure 3.4). This is in excess of the requirement set out in the National Lottery Act 2013 that at least 50% of sales must be returned as prizes.

Figure 3.4: Prizes as a % of National Lottery Sales 1987-2017

0 10 20 30 40 50 60

42.4%1987

46.3%1988

49.1%1989

50.0%1990

51.0%51.2%51.1%51.1%51.3%51.3%51.6%51.5%51.7%52.2%52.5%52.7%52.6%52.7%52.7%53.3%54.1%54.2%53.8%54.8%

55.5%55.3%55.9%56.6%56.8%

56.3%56.5%2017

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Prize Winnings as % of National Lottery Sales




The amount paid in prizes in 2017 was €452 million, its highest level since 2008 (Table 3.5).

Table 3.5: Total National Lottery Prizes (€m) 2007-2017

Year Prize Winnings (€ Million) Prizes as a % Total Sales

2007 420.9 54.1

2008 455.0 54.2

2009 438.3 53.8

2010 419.9 54.4

2011 422.5 55.5

2012 406.4 55.3

2013 382.7 55.9

2014 389.4 56.4

2015 381.1 56.8

2016 422.0 56.3

2017 452.0 56.5

Total 2007-2017 4,590.3 55.3



In 2017 the three games that paid out most in prizes were Scratch Cards (34.3%), Lotto (26.3%) and EuroMillions (19.2%). Scratch Cards paid out most in prizes in 2014, compared to the previous three years when Lotto paid the most in prizes (Table 3.6).

Table 3.6: Breakdown of National Lottery Prizes by Game (%) 2011-2017

Game 2011 2012 2013 2014 2015 2016 2017

Scratch card 25.1% 26.2% 28.8% 31.2% 32.6% 33.6% 34.3%

Lotto 34.7% 32.3% 31.2% 29.3% 30.6% 29.5% 26.3%

EuroMillions 15.1% 16.2% 15.4% 16.5% 15.4% 16.3% 19.2%

EuroMillions Plus 5.5% 6.0% 5.8% 6.3% 6.1% 6.2% 6.6%

Lotto Plus 9.4% 8.7% 8.5% 8.0% 7.4% 6.0% 5.5%

TellyBingo 3.1% 3.2% 3.5% 3.5% 3.1% 2.8% 2.6%

Instant Win Games 0.1% 0.2% 0.2% 0.4% 0.1% 1.2% 1.5%

Lotto 54321 2.2% 2.1% 2.3% 2.1% 2.0% 1.6% 1.5%

Daily Million 0.0% 1.0% 2.2% 2.3% 1.4% 1.3% 1.0%

Raffle 1.1% 1.6% 1.3% 0.5% 0.8% 0.8% 1.0%

Daily Million Plus 0.0% 0.4% 1.0% 0.0% 0.6% 0.6% 0.5%

Monday Million 1.8% 1.1% 0.0% 0.0% 0.0% 0.0% 0.0%

All or Nothing 1.1% 0.6% 0.0% 0.0% 0.0% 0.0% 0.0%

Monday Million Plus 0.8% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0%




In 2017 over 79% of prizes were paid in Scratch Cards, Lotto and EuroMillions (Figure 3.5). EuroMillions Plus accounted for 6.6%.

Figure 3.5: Breakdown of National Lottery Prizes by Game 2017

EuroMillions Plus6.6%

Lotto Plus5.5%

TellyBingo2.6%

IWGs1.5%

Lotto 543211.5%

Daily Million Plus0.5%

Daily Million 1.0%

Raffle1.0%

EuroMillions19.2%

Lotto26.3%

Scratch Cards34.3%



There were 12-15 Lotto prize winners of over €1 million 2015, 2016 and 2017. The average size of these prizes was around €6m in 2017.

Table 3.7: Lotto Prizes over €1m (2015-2017)

Year Winners Amount Won

(€ Million)

% of Total Amount

Won

Average win size

(€ Million)

Jackpots Hit

Average Jackpot Size

When Hit (€ Million)

2015 15 70.0 63.3% 4.7 13 5.4

2016 13 80.2 62.8% 6.2 11 7.3

2017 12 71.8 61.4% 6.0 11 6.5

Total 40 222.0 62.5% 5.6 35 6.3


There were four winners of over €1 million in 2017 for the EuroMillions and the average size win was almost €40 million (Table 3.8).

Table 3.8: EuroMillions Prizes over €1m (2016-2017)

Year Winners Amount Won (€ Million)

% of Total Amount Won in that Year

Average win size (€ Million)

2016 3 91.1 70.4% 30.4

2017 4 157.5 80.0% 39.4




The majority of winners won prizes of less than €1,000 (Table 3.9). There was one prize worth between €500,000 and €999,999, whilst there were 18 winners of prizes of €1 million or above. The majority were won on Lotto, with the others winning on EuroMillions, Daily Million and the Millionaire Raffle.

Table 3.9: Breakdown of Non-Digital National Lottery Prizes 2017 (Number of Winners)

Up to €1,000

€1,001-€10,000

€10,001-€50,000

€50,001-€100,000

€100,001-€500,000

€500,001-€999,999

€1m and over

Total

EuroMillions 5,405,029 117 14 2 9 0 4 5,405,175

Lotto 3,979,158 2,114 23 20 19 1 12 3,981,347

Lotto Plus 2,531,707 119 0 0 23 0 0 2,531,849

TV Bingo 1,310,704 205 14 9 0 0 0 1,310,932

EuroMillions Plus

261,299 5,999 0 0 31 0 0 267,329

Daily Million 74,837 3 0 0 0 0 1 74,841

Daily Million Plus

65,732 9 0 0 1 0 0 65,742

L54321 58,437 65 0 0 0 0 0 58,502

L54321 Plus 1

29,893 39 0 0 0 0 0 29,932

L54321 Plus 2

27,622 32 0 0 0 0 0 27,654

Millionaire Raffle

5,015 35 0 4 1 0 1 5,056

EuroMillions Ireland Only Raffle

0 1,040 0 0 0 0 0 1,040

Total 13,749,433 9,777 51 35 84 1 18 13,759,399



It is interesting to analyse whether or not there are any differences in the lottery-playing population compared to the general Irish population (Table 3.10). A greater proportion of weekly lottery players are male, compared to the even split of people who had ever played the lottery across the general population. A higher percentage of lottery players are over the age of 35 (83%), compared to the general population (71%). The analysis indicates that the regional breakdown of lottery players matches the regional breakdown of the population.

Table 3.10: Comparative Demographic Analysis – National Lottery Players v Population 2017

Demographic Lottery Player Profile

Weekly Lottery Player Profile Census of Population

Gender

Male 50% 56% 49%

Female 50% 44% 51%

Age

18-24 7% 3% 11%

25-34 19% 14% 18%

35-49 32% 35% 30%

50-64 25% 27% 23%

65+ 17% 21% 18%

Region

Dublin 28% 27% 28%

Leinster 27% 28% 27%

Connacht/Ulster 18% 17% 18%

Munster 27% 28% 27%

Source: Indecon Analysis of National Lottery and CSO data

Notes: Data applies to games played at the moment. Figures are averages across Lotto and Lotto Plus, EuroMillions and Scratch cards.



The survey into spend on different Lottery games shows that older men spend more on Lotto and EuroMillions (Table 3.11). When it comes to online Instant Win Games young men have the highest percentage of spend (27%). Spending on Scratch Cards is more evenly split.

Table 3.11: Share of Spend on National Lottery Products

Lotto EuroMillions Scratch Cards Online Instant Win Games

Young Men 8% 11% 19% 27%

Young Women 7% 9% 17% 20%

Middle Men 19% 21% 15% 21%

Middle Women 13% 14% 15% 15%

Older Men 30% 28% 16% 7%

Older Women 23% 17% 19% 11%

Total 100% 100% 100% 100%

Source: Indecon analysis of data provided by PLI/National Lottery data

The social class breakdown of National Lottery players is similar to that of the overall population (Table 3.12). While there are some variations it is, however, clear that all socio-economic groups actively play the lottery.

Table 3.12: National Lottery Participation by Social Class

Social Class Indicator Population Ever Played the Lottery Weekly Lottery Player

AB 13% 13% 12%

C1 28% 27% 27%

C2 20% 21% 23%

DE 32% 32% 32%

F 6% 7% 7%


Notes: Data applies to games currently offered, AB includes: Upper Middle Class and Middle Class, C1 includes Lower Middle Class, C2 includes: Skilled Working Class, DE includes: Working Class and Casual or Lower Grade Workers, F applies to Agricultural workers


3.5 Impact of National Lottery on retail agents

The sales data for the National Lottery’s core retail network is broken down by draw based games and Scratch Cards on a per agent basis (Figure 3.6). Average draw based game sales per agent have remained constant despite the increase in core agencies from 2014 to 2017. When analysed organically, sales have increased slightly over the period. Scratch Card sales have seen a steady increase on a per agent weekly average basis over the same period. Larger fluctuations are due to larger jackpots in some weeks. This is also the case for ‘select’ agents, following their introduction in 2016.

Figure 3.6: Weekly Retail Sales (DBC & SC) and Number of Authorised Agents 2014-2017

€0 €5m €10m €15m €20m €25m

#Retail ex Select Agents (LHS) Retail ex Select Sales (RHS)# Linear (Retail ex Select Agents (RHS) )

0 1000 2000 3000 4000 5000 6000

2017 Wk 50

2017 Wk 45

2017 Wk 38

2017 Wk 31

2017 Wk 24

2017 Wk 17

2017 Wk 10

2017 Wk 3

2016 Wk 49

2016 Wk 42

2016 Wk 35

2016 Wk 28

2016 Wk 21

2016 Wk 14

2016 Wk 7

2015 Wk 53

2015 Wk 46

2015 Wk 39

2015 Wk 32

2015 Wk 25

2015 Wk 18

2015 Wk 11

2015 Wk 4

2014 Wk 50

2014 Wk 43

2014 Wk 36

2014 Wk 29

2014 Wk 22

2014 Wk 15

2014 Wk 8

2014 Wk 1

#Select Agents (LHS) Select Sales (RHS)Linear (Select Agents sales (RHS))

0 1000 2000 3000 4000 5000 6000

0 50000 100000 150000 200000 250000 300000 350000 400000

2015 Wk 10

2015 Wk 08

2015 Wk 06

2015 Wk 04

2015 Wk 12

2015 Wk 02

2014 Wk 52

2014 Wk 50

2014 Wk 48

2014 Wk 46

2014 Wk 44

2014 Wk 42

2014 Wk 40

2014 Wk 38

2014 Wk 36

2014 Wk 34

2014 Wk 32

2014 Wk 30

2014 Wk 28

2014 Wk 26

2014 Wk 24

2014 Wk 22

2014 Wk 20

2014 Wk 18

2014 Wk 16

2014 Wk 14

2014 Wk 12

2014 Wk 10

2014 Wk 08

2014 Wk 06

2014 Wk 04

2014 Wk 01

Source: Indecon analysis of data provided by PLI/National Lottery Data



The significant increase in the number of retail agents in 2016/17 is largely due to the introduction of the Select Channel to complement the Lottery’s existing core network (Figure 3.7). Weekly sales figures fluctuated between €10 million to €15 million between 2014 and 2017.

Figure 3.7: National Lottery Sales Per Retail Agent Excl. Select Agents (Draw Based Games v Scratch Cards)

0 1000 2000 3000 4000 5000

0 1000 2000 3000 4000 5000

2017 Wk 52

2017 Wk 45

2017 Wk 38

2017 Wk 31

2017 Wk 24

2017 Wk 17

2017 Wk 10

2017 Wk 3

2016 Wk 49

2016 Wk 42

2016 Wk 35

2016 Wk 28

2016 Wk 21

2016 Wk 14

2016 Wk 7

2015 Wk 53

2015 Wk 46

2015 Wk 39

2015 Wk 32

2015 Wk 25

2015 Wk 18

2015 Wk 11

2015 Wk 4

2014 Wk 50

2014 Wk 43

2014 Wk 36

2014 Wk 29

2014 Wk 22

2014 Wk 15

2014 Wk 8

2014 Wk 1

Sales per Agent (DBG - Retail ex Select) Sales per Agent (SC - Retail ex Select)Linear (Sales per Agent (SC - Retail ex Select))Linear (Sales per Agent (DBG - Retail ex Select))

DBG SCLinear (SC) Linear (DBG)

€0 €2m €4m €6m €8m €10m €12m €14m €16m

€0 €2m €4m €6m €8m €10m €12m €14m €16m

2016_38

2016_32

2016_26

2016_20

2016_14

2017_9

2017_3

2016_50

2017_27

2017_30

2017_33

2017_42

2017_51

2017_48

2017_21

2017_15

2016_44

2016_8

2016_2

2015_49

2015_43

2015_37

2015_31

2015_25

2015_19

2015_13

2015_7

2015_1

Source: Indecon analysis of data provided by PLI/National Lottery Data


The National Lottery supports a large network of retail agents, totalling 5,780 in 2017. This has expanded by over 50% since 2006 with the greatest increase in 2016/17 because of Select Channel. This saw the retail estate grow from 4002 at the end of 2015 to 5,780 by 2017. Lottery Select allowed for the sale of a limited range of Lottery products through Payzone & PostPoint agents and all Post Offices nationwide using an integrated point of sale solution.

Table 3.13: Number of National Lottery Retail Agents 2006-2017

Year No. Of Agents (Core Network) No. of Agents (Select Channel) Total Agents

2006 3,489 0 3,489

2007 3,623 0 3,623

2008 3,675 0 3,675

2009 3,794 0 3,794

2010 3,813 0 3,813

2011 3,780 0 3,780

2012 3,744 0 3,744

2013 3,745 0 3,745

2014 3,700 0 3,700

2015 4,002 0 4,002

2016 4,008 1,282 5,290

2017 3,969 1,811 5,780


Commission paid to retail agents increased between 2016 and 2017 from €40.6 million to €47 million, reversing a decline between 2014 and 2015 (Table 3.14).



Table 3.14: National Lottery Commissions Paid to Retailers 2006-2017

Year Retail Agent Commissions Paid by National Lottery – € Million

2006 42.1

2007 49.0

2008 52.3

2009 50.9

2010 47.9

2011 47.1

2012 45.4

2013 42.1

2014 42.2

2015 40.6

2016 44.5

2017 47.0


Using the level of National Lottery sales through retail agents, and responses from our survey of retailers, it is estimated that, on average, National Lottery sales amount to 6.44% of total sales (Table 3.15).

Table 3.15: Estimated Total Sales (Lottery and Non-Lottery) of National Lottery Retail Agents 2017

Metric Details

Total National Lottery Sales through Retail Agents (€m) (A) €748.1 m

% of Total Retail Agent Sales from Lottery Products (B) 6.44%

Total Sales (Lottery and Non-Lottery) of National Lottery Retail Agents (€m) (A/B) €11,610.8 m


Notes: Sales through retail agents equates to total sales less online sales. (A) is taken from analysis based on data provided to Indecon by the National Lottery. (B) is derived from Indecon’s Confidential Survey of National Lottery Retail Agents.


In 2017 National Lottery sales through retail agents amounted to €748.1m (Table 3.16).

Table 3.16: Estimated Impact on Retail Agents from Non-Lottery Related Sales 2017

Indicator 2017

Total National Lottery Sales Through Retail Agents (€m) (A) €748.1 m

Estimated Total Sales (Lottery and Non-Lottery) of National Lottery Retail Agents (€m) (B)

€11,610.8 m

Estimated % Increase in Non-Lottery Sales as a Result of Being a National Lottery Retail Agent (C)

5.61%

Total Non-Lottery Sales as a Result of Being a National Lottery Retail Agent (€m) ((B-A)*C)

€609.0 m


Notes: Sales through retail agents equates to total sales less online sales. (C) is taken from Indecon’s Confidential Survey of National Lottery Retail Agents. We apply this proportion to the difference between (A) and (B) in order to estimate non-National Lottery sales supported through the presence of a National Lottery agency.

We estimate that a total of 9,192 full-time equivalent jobs and a total of €269.5 million in employment income are supported through the estimated €609 million in non-National Lottery sales from retailers that have a National Lottery agency (Table 3.17).

Table 3.17: Estimated Employment and Incomes Supported Through Non-Lottery Related Retail Sales 2017

2017

Employment (FTEs) 9,192

Annual Average Earning in the Retail Sector (€) €29,316

Incomes (€m) €269.5 m


Notes: Indecon estimate employment supported through non-National Lottery related retail sales by applying retail sector Employment Effects to data on total non-National Lottery sales as a result of being a National Lottery retail agent. We then apply CSO retail sector wage rates to estimate incomes supported.



Direct employment in 2017 supported through National Lottery sales amounted to 9,902 FTEs, and incomes supported by National Lottery sales amounts to €290.3 million (Table 3.18).

Table 3.18: Summary of Estimated Impacts of National Lottery on Retail Agents 2017

Category 2017

Retail Agent Commissions (€m) €47.0 m

Non-lottery sales supported by presence of National Lottery agency (€m) €609.0 m

Employment directly supported through National Lottery agents’ commissions + non-lottery sales (FTEs) *

9,902 FTEs

Incomes supported (€m) €290.3 m


* Comprising 710 FTEs supported by retail agent commissions and 9,192 FTEs supported by non-Lottery sales supported by the presence of the National Lottery within retail agents

Dublin accounted for 18.4% of national retailers in 2017, followed by the South-East (16.1%), the South-West (14.2%) and the Border region (13.7%) (Table 3.19).

Table 3.19: National Lottery Retail Agents by Region 2017

Region Number of Retailers

Border 790

West 727

Midland 429

Mid-East 495

Dublin 1,063

South-East 932

South-West 823

Mid-West 521

Total 5,780


Note: Estimated based on percentage of retailers in each county as at October 2017.


Dublin accounted for a quarter of total National Lottery revenue through retail agents in 2017 (Table 3.20). The South-West region had National Lottery sales of €101.1 million in 2017, making the second highest contribution to the national total.

Table 3.20: National Lottery Revenue at Retail Agents by Region 2017

Region National Lottery Revenue (€ Million)

Border 93.9

West 75.7

Midland 51.6

Mid-East 76.2

Dublin 190.0

South-East 96.9

South-West 101.1

Mid-West 62.7

Total 748.1





It is estimated that Dublin was the region with the highest National Lottery retail sales in 2017, with the Border, South-East and South-West regions having the next-highest sales (Table 3.21).

Table 3.21: Estimated Total Sales at National Lottery Retail Agents 2017

Region Total Retail Sales (€ Million)

Border 1,669.7

West 1,135.0

Midland ,040.3

Mid-East 1,193.9

Dublin 2,487.6

South-East 1,652.8

South-West 1,510.2

Mid-West 921.2

Total 11,610.8




An estimated €131 million of non-National Lottery sales in Dublin in 2017 were due to retailers having National Lottery games. The South-East has the next highest figure, €96.7 million, followed by the Mid-East, €79.4 million, and the Border region, €75 million (Table 3.22).

Table 3.22: Perceived Estimate of Impact of Availability of National Lottery Games to Non-Lottery Sales

Region Non-Lottery Sales as a Result of Being a National Lottery Retail Agent (€ Million)

Border 75.0

West 48.1

Midland 55.8

Mid-East 79.4

Dublin 131.4

South-East 96.7

South-West 70.1

Mid-West 52.6

Total 609.0





There is evidence of full time equivalent (FTE) jobs arising from non-Lottery sales as a result of retail agents having a Lottery licence. Sales in Dublin supported 21.6% of the total FTE jobs through non-National Lottery retail sales (Table 2.3). Four other regions (South-East, Mid-East, Border and South-West) were estimated to have over 1,000 FTEs supported by sales in 2017.

Table 3.23: Direct Employment Supported by Non-Lottery Related Sales at Retail Agents (FTEs) 2017

Region Estimated Direct Employment Supported through Non-Lottery Related

Sales in that Region – FTEs

Border 1,132

West 726

Midland 842

Mid-East 1,199

Dublin 1,983

South-East 1,459

South-West 1,059

Mid-West 794

Total 9,192


Notes: Indecon estimate employment supported through non-National Lottery related retail sales by applying retail sector Employment Effects to data on total non-National Lottery sales as a result of being a National Lottery retail agent. Estimated based on percentage of retailers in each county as at October 2017.

Indecon applied the average retail sector wage to obtain an estimate for the direct incomes supported by the FTEs estimated previously (Table 3.2.4). Each region was estimated to have supported income of over €20 million in 2017 via the non-National Lottery sales.


Table 3.24: Direct Incomes Supported by Non-Lottery Related Sales at Retail Agents (FTEs) 2017

Region Estimated Direct Income Supported through Non-Lottery Related Sales in that Region (€m)

Border 33.2

West 21.3

Midland 24.7

Mid-East 35.1

Dublin 58.1

South-East 42.8

South-West 31.0

Mid-West 23.3

Total 269.5


Notes: Indecon estimate employment supported through non-lottery related retail sales by applying retail sector Employment Effects to data on total non-lottery sales as a result of being a National Lottery retail agent. We then apply CSO retail sector wage rates to estimate Incomes supported. Estimated based on percentage of retailers in each county as at October 2017.


• More than €5.1 billion was raised for Good Causes from National Lottery sales between 1987 and the end of 2017.

• This funding was used for housing, community development, tourism and sport, arts, heritage, the Gaeltacht, health and children, and youth affairs.

• Almost €8.8 billion has been returned to the community through National Lottery prize winnings since 1987, representing over half (53.5%) of the National Lottery revenue over that period. In 2017, a total of €452 million was paid out in prizes, which equated to 56.5% of sales.

• 2,763 Full-Time Equivalent (FTE) jobs and €104 million in employment incomes are estimated to have been supported through the contribution of National Lottery funding to Good Causes organisations. Lottery funding also supports significant volunteering activity across the country.

• The National Lottery supports its network of retail agents around the country in sales commissions, and supporting non-lottery sales, employment and incomes. It should however be noted that expenditure in the retail sector is likely to be subject to high opportunity and displacement costs (whereby labour and other economic resources are likely to be displaced from other, non-National Lottery retailers). National Lottery commission may however assist in supporting the viability of smaller retailer in regional areas.

4 Assessment of Macro-Economic Impacts


4 Assessment of Macro-Economic Impacts46

4 Assessment of Macro-Economic Impacts4.1 Introduction

The figure below presents an overview of the components of the macro-economic impact of the National Lottery (Figure 4.1). Location of impact is shown from the initial expenditure and the additional impacts that flow from this expenditure.

Figure 4.1: Components of Macro-Economic Impacts of the National Lottery

Description of Macro-Economic Impacts of National Lottery

Initial Expenditure/Impacts Location of Impact Initial Impact Additional Impacts

Consumption Related GDP Impacts

Gross Consumer Expenditure on

National Lottery Products Less Prize

Winnings Paid Back to Players

PLI DAC/National Lottery Company

Direct, Indirect and Induced Economic

Impacts

Employment, Wages and Salaries Supported

Re-Spending of National Lottery Prize

Winnings

National Lottery Players


Impacts


Additional Consumer Expenditure on Non-

National Lottery Products

Retail Agent NetworkDirect, Indirect and Induced Economic

Impacts


Retail Agent Impacts

Agent Commissions Received From the National Lottery

Retail Agent NetworkDirect, Indirect and Induced Economic

Impacts


Beneficiary Funding Impacts

Beneficiary Funding Received From National

Lottery Fund

National Lottery Beneficiaries


Impacts


Source: Indecon



The key macro-economic impact arising from the National Lottery is focused on the contribution to personal consumption, which forms part of Irish economy GDP. The overall consumption contribution is derived using a mix of components (Figure 4.2).

Figure 4.2: Composition of National Lottery Net Consumption Impact on GDP

Direct/Gross Consumption Contribution of National Lottery to Irish Economy GDP

=

National Lottery Sales

Less

Prize Winnings

Net Consumption Contribution of National Lottery to Irish Economy GDP

=

Direct/Gross Consumption Contribution

+

Spending of Prize Winnings

+

Additional Non-Lottery Sales Supported within Lottery Retail Agents

Less

Displacement of Non-Lottery Expenditures

Source: Indecon


4.2 Expenditure/GDP Impacts

In this section the overall contribution of the National Lottery to Gross Domestic Product (GDP) is estimated. This has been achieved by combining a number of consumption and expenditure-related impacts, including:

• Expenditure on National Lottery products less prizes paid back to players;• Non-National Lottery related expenditure at National Lottery retail agents; • Consumer expenditure of prize winnings.The direct/gross consumer expenditure impact is calculated by subtracting prize winnings from expenditure on National Lottery products. In 2017 the direct/gross consumer expenditure impact was €348 million, an increase of 6% from the previous year (Table 4.1)

Table 4.1: Consumer Expenditure on National Lottery Products (€m) 2012-2017

Year Total Consumer Expenditure on National

Lottery Products (A) – (€m)

Total Prizes Winnings of National Lottery Players

(B) – (€m)

Direct/Gross Consumer Expenditure Impact

(A-B) – (€m)

2012 735 406 329

2013 685 383 303

2014 688 388 300

2015 670 381 289

2016 750 422 328

2017 800 452 348


Notes: Direct Consumer impact relates to sales of lottery products less prizes paid back to the consumer. (A) relates to total National Lottery Sales. (B) relates to National Lottery Prizes paid back to consumers.



Using our sectoral input-output model of the Irish economy, the estimate for the multiplier impact in 2017 is €204 million, which brings the economy-wide estimated impact of consumer expenditure on National Lottery products to €552 million.

Table 4.2: Economy-Wide Impacts of Consumer Expenditure on Lottery Products (€m) 2012-2017

Year Direct/Gross Consumption

Expenditure Impact (€m)

Multiplier Impact (€m) Economy-wide Direct/Gross Consumer

Expenditure Impact (Direct + Multiplier

Impact) – (€m)

2012 329 193 522

2013 303 178 481

2014 300 176 476

2015 289 169 458

2016 328 192 520

2017 348 204 552


Notes: Direct Consumer impact relates to sales of lottery products less prizes paid back to the consumer. Indecon apply ‘retail sector’ multipliers as this is where the point of sale/expenditure is located. Multiplier Impacts include indirect and induced impacts.

The impact on the economy of expenditure from prize winnings was examined. Prize data was used to segment these winnings into size categories. Given the absence of available research on the proportion of prize winnings that are spent high, low and central scenarios were estimated in each category. The percentage of winnings spent in 2017 for each prize tier and scenario are estimated in the next table (Table 4.3).


Table 4.3: Estimated Consumer Spending Impact of Percentage of Winnings in 2017 for Each Prize Tier and Scenario

Size category of Prizes

Up to €1,000

€1,001- €10,000

€10,001- €50,000

€50,001- €100,000

€100,001- €500,000

€500,001- €999,999

€1 Million

and Over

Total

Winnings – € Million

Prize Winnings in 2017 – Products excl. Scratchcards/Instant

€ Million

€112.37 €23.71 €1.65 €2.46 €31.36 €0.55 €231.34 €403.45

Prize Winnings in 2017 – Scratchcards/Instant

€ Million*

€77.50 €62.00 €15.50 - - - - €155.00

Total Amount of Winnings in 2017 – € Million

€189.87 €85.71 €17.15 €2.46 €31.36 €0.55 €231.34 €558.45

% of Total Winnings

34.00% 15.35% 3.07% 0.44% 5.62% 0.10% 41.43% 100%

Assumed % of Winnings Spent in Year 1

Low Scenario 90.00% 80.00% 50.00% 40.00% 12.00% 7.00% 3.00%

High Scenario 100.00% 90.00% 60.00% 50.00% 15.00% 8.80% 3.80%

Central Scenario

100.00% 86.00% 57.50% 47.50% 13.50% 7.90% 3.40%

Estimated Winnings by Size Category Spent in Year 1 – € Million

Low Scenario €170.88 €68.57 €8.58 €0.99 €3.76 €0.04 €6.94 €259.75

High Scenario €189.87 €77.14 €10.29 €1.23 €4.70 €0.05 €8.79 €292.07

Central Scenario

€189.87 €73.71 €9.86 €1.17 €4.23 €0.04 €7.87 €286.75


Note: * Breakdown of Scratch card/Instant Winnings in 2017 estimated by Indecon.



The economic impact of spending of National Lottery prize winnings is examined below (Table 4.4). The low scenario estimate places the economic impact at €259.75 million, with the high scenario estimating economic impact to be €292.07 million. The central scenario of €286.75 million is the overall estimate.

Table 4.4: Scenario of Estimated Economic Impact of Spending of National Lottery Prize Winnings (€m) 2017

Year Scenario 1 – Low (€m)

Scenario 2 – Central (€m)

Scenario 2 – High (€m)

2017 €259.75 €286.75 €292.07


Estimates for the economy-wide impact of the National Lottery on non-lottery related retail sales (as previously described in Section 3.5) at retail agents for 2017 are €966 million (Table 4.5).

Table 4.5: Estimated Direct, Indirect and Induced Economic Impact of Expenditure on Non-Lottery Related Sales at Retail Agents (€m) 2017

Year Estimated Non-Lottery Sales Supported By

National Lottery – (€m)

Multiplier Impacts – (€m)

Economy-wide Supplier Impacts (Direct +

Multiplier Impacts) – (€m)

2017 609.0 357.0 966.0

Source: Indecon analysis of Survey of National Lottery Retail Agents, National Lottery Data and CSO Data

Note: While sales are non-lottery, they occur at the specific retail outlets because of the availability of lottery at the retailer.


The combined direct/gross consumer expenditure on lottery products, the consumer expenditure impact of the spend of National Lottery prizes and the estimated Impact of lottery agency on non-lottery sales was estimated (Table 4.6).

Each of the three scenarios for the overall economic impact of consumer spending on National Lottery and non-National Lottery products in 2017 are outlined below:

• Low Estimate – €1,930.3 million• Central Estimate – €1,973.1 million• High Estimate – €1,981.6 million

These estimates include direct, indirect and induced impacts from consumer expenditure on National Lottery and non-National Lottery products at National Lottery retail agents.

Table 4.6: Overall Direct, Indirect and Induced Impact of Consumer Spending on Lottery and Non-Lottery Products (€m) 2017

Category of Expenditure Direct Consumption

Impact (€m)

Multiplier Consumption

Impact (€m)

Economy-wide Consumption

Impact (Direct + Multiplier Impact)

– (€m)

(A) Consumer Spending on Lottery Products – Direct/Gross Impact

348.2 204.1 552.3

(B) Lottery Prize Winnings – Estimated Spending of:

Low Estimate 259.8 152.3 412.0

Central Estimate 286.8 168.1 454.9

High Estimate 292.1 171.2 463.3

(C) Lottery Retailer Agents – Estimated Impact of Lottery Agency on Non-Lottery Sales

609.0 357.0 966.0

Estimated Overall Consumer Expenditure Impact of National Lottery (A + B + C)

Low Estimate 1,216.9 713.4 1,930.3

Central Estimate 1,243.9 729.2 1,973.1

High Estimate 1,249.2 732.3 1,981.6


Notes: Multiplier impacts include indirect and induced impacts.



4.3 Expenditure Impacts on Suppliers

The economy-wide impact of the National Lottery on non-lottery sales at retail agents for 2017 is estimated to be €966 million (Table 4.7). However, it is important to note that there is likely to be a significant degree of displacement (whereby labour and other economic resources may be displaced from other, non-Lottery retailers).

Table 4.7: Estimated Direct, Indirect and Induced Economic Impact of Expenditure on Non-Lottery Related Sales at Retail Agents (€m) 2017

Year Estimated Non-Lottery Sales Supported by National

Lottery – (€m)

Multiplier Impacts – (€m) Economy-wide Supplier Impacts

(Direct + Multiplier Impacts) – (€m)

2017 609.0 357.0 966.0

Source: Indecon analysis of Survey of National Lottery Retail Agents, National Lottery Data and CSO Data

Notes: While sales are non-lottery, they occur at the specific retail outlets because of the availability of lottery at the retailer.

As discussed in Section 3.3, the National Lottery returns a proportion of its revenue to the community via Good Causes. In 2017, the amount given directly was €226.3 million. Applying a sectoral model of the Irish economy, it is calculated that the indirect and induced effects of this expenditure are €144.7 million, giving a total economy-wide impact of €371 million (Table 4.8).

Table 4.8: Sub-Supplier Expenditure Impacts of National Lottery Funding for Good Causes (€m) 2017

Direct Expenditure (€m)

Multiplier Impacts (€m)

Economy-wide Supplier Impacts

(Direct + Multiplier Impact) (€m)

Total National Lottery Funding/ Expenditure

226.3 144.7 371.0

Source: Indecon analysis based on National Lottery and CSO data


4.4 Employment and Incomes Supported by National Lottery

The overall level of employment and associated employment incomes supported in the Irish economy through the presence of the National Lottery is comprised of the following components:

• Employment and incomes supported by Premier Lotteries Ireland;• Employment and incomes supported directly through National Lottery funding

for Good Causes;• Employment and incomes supported through the spending of prize winnings;• Employment and incomes supported within the National Lottery retail agent network; • The indirect and induced (multiplier) impacts of each of the above forms

of employment.

Each of the above aspects is examined below.

Employment and employment incomes supported by Premier Lotteries Ireland

The number of employees at Premier Lotteries Ireland, and the multiplier effects in terms of employees at the company (Table 4.9) was looked at. It is estimated that the multiplier impacts add an additional 23 FTEs to the impact of PLI.

Table 4.9: Direct, Indirect and Induced Employment Supported by Premier Lotteries Ireland (FTEs) 2017

Year Direct Employment (FTEs)

Estimated Multiplier Impacts – FTEs

Economy-wide Employment Impact

(Direct + Multiplier Impact) – FTEs

2017 96 23 119

Source: Analysis based on Premier Lotteries Ireland data

Premier Lotteries Ireland spent €6.9 million on wages in 2017. This had an estimated multiplier impact of €2.9 million, giving an estimated economy-wide income impact of €9.8 million (Table 4.10).



Table 4.10: Direct, Indirect and Induced Impact of Premier Lotteries Ireland Expenditure on Incomes (€m) 2017

Year Estimated Direct Incomes – (€m)

Estimated Multiplier Impacts – (€m)

Economy-wide Income Impact (Direct + Multiplier

Impact) – (€m)

2017 6.9 2.9 9.8

Source: Analysis based on Premier Lotteries Ireland data

Employment and incomes supported within the National Lottery retail agent network

There are two aspects of employment and associated incomes supported within the National Lottery retail agent network:

• Employment and incomes related to the commissions received by agents from PLI;• Employment and associated incomes supported through the impact of the National

Lottery on non-Lottery sales within retailers.

The level of direct employment estimated to be supported by retail agent commissions in 2017 was 709 FTEs. Using our model of the Irish economy, it is estimated that the indirect and induced employment supported by these commissions is 173 FTEs, leading to an economy-wide level of 882 FTEs (Table 4.11).

Table 4.11: Direct, Indirect and Induced Employment Supported by National Lottery Retail Agents’ Commissions (FTEs) 2017

Year Estimated Direct Employment Supported

through Lottery Agent Commissions – FTEs

Estimated Multiplier Impact – FTEs



2017 709 173 882


Notes: Indecon applies retail sector multipliers and effects in our analysis of economy wide impacts of retail agents. The impacts measured in this data consist of employment supported through retail agent commissions received from the National Lottery. Multiplier impacts include indirect and induced impacts.


It is estimated that direct full-time equivalent employment supported by non-National Lottery related sales at retail agents is 9,192. For indirect and induced employment there are an additional 2,240 FTEs (Table 4.12). Thus the total economy-wide employment supported by non-National Lottery related sales at retail agents is estimated at 11,433 in 2017.

Table 4.12: Direct, Indirect and Induced Employment Supported by Non-Lottery Related Sales at Retail Agents (FTEs) 2017

Year Estimated Direct Employment Supported

through Non-Lottery Related Sales – FTEs

Estimated Multiplier Impact – FTEs

Economy-wide Employment Impact (Direct + Multiplier

Impact) – FTEs

2017 9,192 2,240 11,433


Notes: Indecon estimated employment supported through non-National Lottery related retail sales by applying retail sector Employment Effects to data on total non-National Lottery sales as a result of being a National Lottery retail agent. Indecon then applied retail sector multipliers and effects in our analysis of economy wide impacts of retail agents. Multiplier impacts include indirect and induced impacts.

Incomes earned through the employment supported by retail agent commissions from the National Lottery are outlined in Table 4.13. The direct incomes supported were estimated to be €20.8m in 2017, with indirect and induced impacts estimated to add a further €8.8m to reach an economy-wide impact of €29.6m in 2017.

Table 4.13: Direct, Indirect and Induced Employment Incomes Supported by National Lottery Sales at Retail Agents (€m) 2017

Year Estimated Direct Incomes Supported

through Lottery Agent Commissions – €m

Estimated Multiplier Impact – €m


(Direct + Multiplier Impact) – €m

2017 20.8 8.8 29.6


Notes: Indecon applies retail sector multipliers and effects in our analysis of economy wide impacts of retail agents. The impacts measured in this data consist of Incomes supported through retail agent commissions received from the National Lottery. Multiplier impacts include indirect and induced impacts. We then apply CSO retail sector wage rates to estimate Incomes supported. Multiplier impacts include indirect and induced impacts.



Estimates for the direct, indirect and induced impacts of non-National Lottery related sales at National Lottery retail agents are contained in Table 4.14. The economy-wide income impact of non-National Lottery sales at retail agents is estimated to have been €384 million in 2017.

Table 4.14: Direct, Indirect and Induced Employment Incomes Supported by Non-Lottery Related Sales at Retail Agents (€m) 2017

Year Estimated Direct Income Supported

through Non-Lottery Related Sales – €m


Economy-wide Income Impact (Direct +

Multiplier Impact) – €m

2017 269.5 114.6 384.0

Source: Indecon analysis based on Survey of National Lottery Retailers and CSO Data

Notes: Indecon estimate employment supported through non-lottery related retail sales by applying retail sector Employment Effects to data on total non-lottery sales as a result of being a National Lottery retail agent. Indecon then applies retail sector multipliers and effects in our analysis of economy wide impacts of retail agents. We then apply CSO retail sector wage rates to estimate Incomes supported. Multiplier impacts include indirect and induced impacts.

Employment and incomes supported by Lottery funding for Good Causes

Good Causes funding has had an impact on employment in beneficiary organisations. Applying sectoral employment effects, and calculating the number of FTEs supported per €1m of expenditure, the estimated economy-wide impact of this funding for Good Causes was 3,910 FTEs in 2017 (Table 4.15).

Table 4.15: Direct, Indirect and Induced Employment Supported by National Lottery Good Causes Funding (FTEs) 2017

Estimated Direct Employment

Supported through Lottery

Beneficiaries – FTEs

Estimated Multiplier Impacts

– FTEs

Economy-wide Employment

Impact (Direct + Multiplier Impact)

– FTEs

Employment Supported 2,763 1,147 3,910

Source: Indecon Analysis of Revised Estimates for Public Service Expenditure 2018 and CSO Data



The estimated direct income supported by jobs related to Good Causes funding in 2017 was €104 million. Economy-wide incomes supported due to Good Causes funding in 2017 is estimated at €147.2 million (Table 4.16).

Table 4.16: Direct, Indirect and Induced Employment Incomes Supported by National Lottery Good Causes Funding (€m) 2017

Estimated Direct Income Supported

through Lottery Beneficiaries – €m


Economy-wide Income Impact

(Direct + Multiplier Impact) – €m

Employment Incomes

104.0 43.2 147.2

Source: Indecon Analysis of Revised Estimates for Public Service Expenditure 2018 and CSO Data


Employment and incomes supported through spending National Lottery prize winnings

Employment across a variety of economic sectors is also supported via the spending of prize winnings. Three scenarios were used to estimate employment supported by this expenditure, based on the proportion of prize winnings that are spent by the winner (Table 4.17).

Table 4.17: Direct, Indirect and Induced Employment Supported by Spending of Prize Winnings (FTEs) 2017

Scenario Estimated Direct Employment Supported

through Spending of Prize Winnings – FTEs

Estimated Multiplier Impacts –

FTEs



Scenario 1 – Low Estimate 3,921 956 4,877

Scenario 2 – Central Estimate 4,329 1,055 5,383

Scenario 3 – High Estimate 4,409 1,074 5,483





The lower end estimate suggest economy-wide income supported by spending of prize winnings is €210.4 million, with the higher end being €236.5 million. The central estimate for 2017 is €232.2 million in income supported by the spending of National Lottery prize winnings (Table 4.18).

Table 4.18: Direct, Indirect and Induced Employment Incomes Supported by Spending of Prize Winnings (€m) 2017

Scenario Estimated Direct Income Supported

through Spending of Prize Winnings – (€m)

Estimated Multiplier

Impacts – (€m)

Economy-wide Income Impact

(Direct + Multiplier Impact) – (€m)

Scenario 1 – Low Estimate 147.6 62.8 210.4

Scenario 2 – Central Estimate 163.0 69.3 232.2

Scenario 3 – High Estimate 166.0 70.6 236.5




Breakdown of overall employment supported by National Lottery

It is estimated that the National Lottery directly supported a total of 17,090 full-time equivalent jobs in 2017. This includes individuals employed within PLI, jobs supported within Good Causes beneficiary organisations, employment supported through the spending of prize winnings, and jobs supported within the National Lottery retail agent network. When indirect and induced multiplier impacts are included, this employment impact rises to 21,728 jobs across the Irish economy.

Table 4.19: Breakdown of Overall Employment Supported by the National Lottery (FTEs) 2017

Direct Employment Supported –

FTEs

Multiplier Impacts – Additional Indirect

and Induced Employment

Supported across Irish Economy –

FTEs

Total Employment Supported Across

Irish Economy (incl. Multiplier

Impacts) – FTEs

Employment in PLI/National Lottery 96 23 119

Employment supported by non-Lottery sales in retail agent network

9,192 2,240 11,433

Employment supported by retail agent commissions

709 173 882

Employment supported by National Lottery funding to beneficiary organisations

2,763 1,147 3,910

Employment supported by spending of National Lottery prize winnings

4,329 1,055 5,383

Total Employment Impact 17,090 4,638 21,728


Notes: Direct employment supported includes employment within the National Lottery, estimated employment supported within the retail agent network, estimated employment created by the spending of prize winnings in the economy and estimated employment supported within organisations in receipt of funding for Good Causes. Multiplier impacts include indirect and induced impacts.



The estimated overall employment incomes supported by the National Lottery are summarised in Table 4.20 below. Direct incomes supported are estimated at €564.2 million, increasing to €802.9 million when multiplier impacts are taken into consideration.

Table 4.20: Estimated Direct, Indirect and Induced Income Impacts Supported by National Lottery (€m) 2017

Direct Income Supported –

FTEs

Multiplier Impacts – Additional Indirect

and Induced Income Supported

across Irish Economy – FTEs

Total Income Supported Across

Irish Economy (incl. Multiplier

Impacts) – FTEs

Income supported by PLI/National Lottery

6.9 2.9 9.8

Income supported by non-Lottery sales in retail agent network

269.5 114.6 384.0

Income supported by retail agent commissions

20.8 8.8 29.6

Income supported by National Lottery funding to beneficiary organisations

104.0 43.2 147.2

Income supported by spending of National Lottery prize winnings

163.0 69.3 232.2

Total Income Impact 564.2 238.8 802.9


Notes: Figures consist of incomes supported by the National Lottery, two categories of income across the retail agent network, estimated incomes created by the spending of prize winnings in the economy and incomes supported by beneficiaries. Multiplier impacts include indirect and induced impacts.


4.5 Exchequer Taxation Impacts

As outlined in previous sections, the National Lottery supports employment and incomes throughout the Irish economy. In this section, the proportion of these incomes that is returned to the Exchequer in the form of taxation is estimated. In order to compute these estimates, the 2017 tax calculators for the Irish economy is used, assuming that employees are single rate tax payers.

The National Lottery also supports the Exchequer in terms of its tax contribution. It is estimated that the exchequer received €2.35 million in tax from National Lottery employees in 2017.

Table 4.21: Estimated Taxation Paid to the Exchequer by National Lottery Employees 2017 (€)

Year Wages and Salaries (€)

Direct Employment

(FTEs)

Average Gross Salary (€)

Estimated Income Taxation per FTE

(€)*

Total Tax Paid (€)

2017 6,900,000 96 71,875 24,457 2,347,905

Source: Indecon modeling

Notes: * Estimated on basis of assuming individuals employed are single rate tax payers.

The taxation from employment directly supported by Good Causes beneficiaries is estimated in Table 4.22. Just over €21 million is estimated to have been paid to the Exchequer in 2017.

Table 4.22: Estimated Taxation Paid to the Exchequer Due to National Lottery Good Causes Funding 2017 (€)


Direct Employment

(FTEs)


Estimated Income Taxation per FTE

(€)*


2017 104,033,739 2,763 37,646 7,677 21,215,189





It is estimated that 709 FTEs were directly supported by retail agents’ commission from the National Lottery. They paid over €3 million in tax to the Exchequer in 2017 (Table 4.23).

Table 4.23: Estimated Taxation Paid to the Exchequer by Retail Agent Employees 2017 (€)


Direct Employment

(FTEs)


Estimated Income

Taxation per FTE (€)*


2017 20,798,556 709 29,316 4,492 3,186,969



Jobs supported by non-National Lottery related sales from retail agents contributed just over an estimated €41 million in tax to the exchequer (Table 4.24). The average employee is estimated to have paid almost €4,500 in tax in 2017.

Table 4.24: Estimated Taxation Paid to the Exchequer by Retail Agent Employees Supported by Non-National Lottery Sales in 2017 (€)


Direct Employment

(FTEs)


Estimated Income



2017 269,482,484 9,192 29,316 4,492 41,292,887




Using the central estimate from the previous analysis on the level of prize winnings that were spent by prize winners, it is estimated the tax revenue generated by this expenditure was over €33 million (Table 4.25).

Table 4.25: Estimated Taxation Paid to the Exchequer by Employees Supported by the Respending of National Lottery Prize Winnings (€)


Direct Employment

(FTEs)

Average Gross

Salary (€)

Estimated Income



2017 162,952,023 4,329 37,646 7,677 33,230,162



By combining the results from each of the above analyses on tax paid to the exchequer in Table 4.26 it is estimated that the total exchequer impact in 2017 was €101.3 million.

Table 4.26: Estimated Exchequer Impacts Supported by National Lottery (€m) 2017

Year Exchequer Impacts (€m)

2017 101.3



• The estimated overall GDP impact of National Lottery spending in 2017 is estimated to be €1,973 million.

• The estimated gross annual exchequer impact of National Lottery spending in 2017 is €101.3 million. This excludes any returns to the Exchequer from its role as a shareholder in the National Lottery.

5 Wider Market Developments


5 Wider Market Developments66

5 Wider Market Developments5.1 Introduction

In this section the market environment in which the National Lottery operates is examined.

5.2 The Gambling Sector in Ireland

Using data from the Revenue Commissioners for betting duty receipts from 2011 to 2015 (Table 5.1) the size of the gambling sector is estimated, including all taxable betting activity, plus National Lottery sales.

Of particular note is the sharp increase in remote/online betting duty receipts after 2015. This reflects the Betting (Amendment) Act 2015, which brought betting intermediaries and remote bookmakers under the same 1% turnover betting duty umbrella. It meant that online and mobile bookmakers would pay the same duty as land-based bookmakers.

Table 5.1: Revenue Commissioner Data on Betting Receipts (€ Million) 2011-2016

2011 2012 2013 2014 2015 2016

Traditional Betting Duty 27.1 27.1 25.4 26.2 27.7 28.1

Remote Betting 0.1 0.1 0.1 0.1 3.0 20.7

Betting Commissions 0.4 0.4 0.4 0.4 0.3 1.9

Bookmakers Licences 0.1 0.1

Bookmaking Premises 0.1 0.6

Remote Betting Intermediaries 0.1 0.0

Remote Bookmakers 0.3 0.2

Total 27.6 27.6 25.9 26.7 31.6 51.7

Source: Revenue data

The rate of betting duty (1%) for bets ‘entered into by a bookmaker or remote bookmaker with persons in the State’, and the Betting Intermediary Duty (15%) for the ‘commission charged by a remote betting intermediary to persons in the State for using the facilities of that intermediary to make bets’, were applied to the receipts presented in the previous table to arrive at an estimate for the overall level of consumer spending on betting, including traditional and remote/online betting. This amounts to approximately €4.9 billion in 2016. Adding the sales of the National Lottery gives an overall estimate of expenditure on betting and on the Lottery of approximately €5.6 billion in 2016. Of this estimate, National Lottery sales represented approximately 13% (Table 5.2).



Table 5.2: Indicative Estimate of Size of Gambling Sector in Ireland 2016

€ Million

Traditional Betting Duty 2,812.6

Remote Betting (Online) 2,074.9

Estimated Total Expenditure on Betting* 4,887.6

National Lottery Revenue 750.2

Total (Including National Lottery) 5,637.8

Source: Indecon analysis of National Lottery and Revenue Commissioners data

* Excludes betting commissions and licenses & premises.

It is important to note that not all betting activities are close substitutes for lottery betting. In particular, consumers may participate in the National Lottery knowing that funds will be distributed to Good Causes. However, the estimated size of the remote/online betting market in Ireland highlights the changing composition of the wider gambling sector driven strongly by the internet and increased accessibility to gambling online.

5.3 Lottery and Other Forms of Betting

When examining developments in the lottery market, it is instructive to first consider developments in the overall online betting industry, of which online lottery betting forms a subset.

The Gambling Commission in the UK published their annual report on gambling participation for 2016 in February 2017. They found that 48% of respondents to their survey had participated in gambling in the four weeks leading up to their survey, which was up slightly from their previous findings (45% in the year up to December 2015).

When asked about online gambling, 17% responded that they had gambled online in the past four weeks. This was also an increase on the previous findings. Males were more likely to have participated in online gambling than females, with over 20% having gambled in the four weeks leading up to the 2016 survey, compared with fewer than 15%. Those between the ages of 35 and 44 were the mostly likely to have participated in online gambling, with those in the 25-34 age range being the second most likely (Figure 5.1).


Figure 5.1: Frequency of Gambling (UK) 2013-2016

0 10 20 30 40 50

2+ days a week

Once a week

Once a month, less than once a week

Less than once a month

Year to Dec 2013 Year to Dec 2014 Year to Dec 2015 Year to Dec 2016

Source: Gambling Commission UK

Based on available data in the UK, playing the UK National Lottery in person has become less popular over time. Whilst still one of the most popular forms of gambling activity, there was a decline of five percentage points between 2013 and 2016. In person participation in other UK lotteries fell dramatically between 2013 and 2016 (Figure 5.2).



Figure 5.2: Type of Gambling Activity (UK – In Person) 2016

National Lottery draws

Other lotteries

Bingo

Football pools

Horse races

Dog races

Sport betting

Betting on other events

Virtual dog or horse races

Spread betting

Casino games


0 10 20 30 40 50 60 70 80 90 100


While in person participation in the UK National Lottery has declined, there has been a slight increase in online UK National Lottery participation. Almost 30% of respondents played online. There was strong growth in participation in other lotteries online, with 38% participation in other lotteries in 2016, compared to 16% in 2013 (Figure 5.3).


Figure 5.3: Type of Gambling Activity (UK – Online) 2016

0 10 20 30 40 50 60 70 80 90 100

National Lottery draws

Other lotteries

Bingo

Football pools

Horse races

Dog races

Sport betting

Betting on other events

Virtual dog or horse races

Spread betting

Casino games



Ireland has one of the highest rates of awareness of bet-on-lottery websites across Europe (Table 5.3), ranking below Spain, Portugal and Switzerland (French speaking).



Table 5.3: Awareness of Bet-On-Lottery Websites

Country Percentage of Respondents

Spain 66%

Portugal 59%

French Switzerland 53%

Ireland 50%

Belgium 47%

France 42%

German Switzerland 40%

Austria 39%

UK 32%

Luxembourg 25%

Source: Harris Interactive France

Those surveyed were asked if they knew any specific bet-on-lottery websites, with 31% of Irish respondents stating that they knew at least one. 27% of respondents said that they knew one company (Competitor 1), which had the highest recognition across the various bet-on-lottery websites. When looking purely at those who are EuroMillions players, the percentage of people aware of bet-on-lottery websites increased across the board, with 38% knowing at least one website and 34% knowing Competitor 1 (Table 5.4).

Table 5.4: Awareness of Bet-On-Lottery Websites in Ireland

Country Percentage of All Respondents

Percentage of Respondents who are

EuroMillions Players

At least one website known 31% 38%

Competitor 1 27% 34%

Competitor 2 5% 6%

Competitor 3 9% 10%

Competitor 4 5% 5%



In a different survey conducted on behalf of the National Lottery, awareness of Competitor 1 has been steadily increasing since August 2016 and reached 32% of respondents in May of 2017, which is in keeping with the above findings (Figure 5.4).

Figure 5.4: Awareness of National Lottery Competitor 1 (Aug 2016-May 2017)

19%

21%

24%

25%

27%

31%

31%

27%

30%

32%

0 5 10 15 20 25 30 35 40

August

September

October

November

December

January

February

March

April

May

Source: Indecon analysis of data provided by Kantar Millward Brown



When asked about the usage rate of bet-on-lottery websites, 6% of respondents said that they had played games on at least one website (Table 5.5). This increased to 7% when looking at those who are EuroMillions players. 5% of the total survey sample said that they had played at least one game on Competitor 1’s website.

Table 5.5: Users of Bet-On-Lottery Websites in Ireland

Country Percentage of All Respondents

Percentage of Respondents who are EuroMillions Players

At least one website played 6% 7%

Competitor 1 5% 5%

Competitor 2 1% 1%

Competitor 3 1% 1%

Competitor 4 1% 1%



In the second survey focusing on Competitor 1, those who said they were aware of Competitor 1 were asked if they had played a game on their website. The percentage of people responding ‘yes’ to this question declined from December 2016 to May 2017, reaching 16%. This was despite an increase in the percentage of people who said they were aware of Competitor 1 (Figure 5.5).

Figure 5.5: Percentage of Those Aware of Competitor who have Played a Game on Competitor’s Website (Nov 2016-May 2017)

28%

30%

23%

25%

22%

19%

16%

0 10 20 30 40

November

December

January

February

March

April

May

Source: Indecon analysis of data provided by Kantar Millward Brown



There are a number of differentiators within the market for lotteries and bet-on-lottery operators including:

• Availability of international lotteries;• Legislatively mandated funds for Good Causes;• Account offer/Loyalty schemes; and,• Game-specific differentiators.

These are considered below.

The National Lottery offers draw based games, scratch cards and IWGs. Whilst the National Lottery offers a European lottery game, EuroMillions, some of the National Lottery’s competitors offer participation in multiple lotteries around the world, including the US Powerball, the French lottery and the US MegaMillions. These bet-on-lottery operators have introduced an offering that until recently was not available to players of the National Lottery in Ireland.

Whilst there is no national lottery in Australia, there are similar state lotteries in operation. There is evidence of the demand for international lotteries when an online bet-on-lottery service was launched in Australia, to coincide with a rollover on the US Powerball of $1.6 billion. A quarter of a million sign-ups were reported in the days leading up to the draw. This is in line with the findings of consumers’ willingness-to-pay for National Lottery tickets. A positive relationship between the jackpot amount and the demand for tickets is observable. Thus, it seems there is demand in Ireland for large jackpots such as those offered in the US.

One of the key differences in relation to the National Lottery and other competitors is that the National Lottery is mandated to provide funding to Good Causes, and to return at least 50% of its revenue as prizes to winners of its games. There is no such requirement for other operators in the market. This means approximately 85% of revenue generated by the National Lottery will be returned to the community in the form of prize winnings and Good Causes funding; the sum returned to the community rises to 91% when commission to retailers is included.

There are also differentiators within certain games, for example, in some bookmakers, customers can bet on certain numbers coming up in a National Lottery draw. Thus, rather than choosing six numbers for a Lotto ticket, the customer is enabled to bet on a single number being drawn. Customers are offered odds on their chosen number appearing, or customers could also place a bet on multiple numbers being drawn out as part of the National Lottery draw. This marks a key differentiator, as the customer has the ability to choose their own stake and the combination of numbers they would like to select.

Other companies offer the ability to protect a jackpot, which means that if the customer chooses this option (paying a premium to do so) where they win the jackpot; the customer will be paid over the entire jackpot amount. In the case of the National Lottery, where two or more people win the jackpot prize; customers would share the jackpot. However, if two customers paid for this jackpot protection with the same company they bet on the National Lottery with; then they would each win the jackpot amount.


5.4 Comparative International Analysis

The level of EuroMillions sales per capita for each of the nine countries involved in EuroMillions was examined(Table 5.6). Whilst per capita sales fell slightly in Portugal between 2015 and 2016, it remained the country with the highest sales per capita of any of the nine countries. Ireland experienced the highest growth in sales per capita, with sales per capita reaching €28.3 in 2016 for EuroMillions draws.

Table 5.6: EuroMillions Sales Per Capita € (2015-2016)

2015 2016 Change % Change

Portugal 79.4 75.5 -3.9 -4.9%

Luxembourg 67.6 64.1 -3.5 -5.2%

Switzerland 42.8 43.2 0.4 0.9%

Austria 35.1 36.6 1.5 4.3%

Belgium 36.7 36.3 -0.4 -1.1%

Ireland 25.1 28.3 3.2 12.7%

Spain 25.2 25.5 0.3 1.2%

UK 23.3 21.0 -2.3 -9.9%

France 17.6 17.0 -0.6 -3.4%

Source: Company Service aux Lotteries en Europe

In a wider survey, (Table 5.7) of four countries Ireland, the US, Canada and the UK Ireland was found to have the lowest number of residents per retailer, with 888 residents per draw in 2016. This compared to 1,154 for the United States, 1,227 for Canada and 1,406 for the UK.



Table 5.7: Number of Residents Per Retailer

2015 2016

No. Retailers Pop (million)

Per Capita No. Retailers Pop (million)

Per Capita

Ireland 4,002 4.6 1,149 5,290 4.7 888

US 237,911 305.5 1,284 264,833 305.5 1,154

Canada 26,491 33.5 1,265 29,585 36.3 1,227

UK 45,000 63.7 1,416 45,296 63.7 1,406

Source: La Fleur’s World Lottery Almanac and Camelot UK

Of 100 countries Ireland’s overall lottery sales per capita grew from €146 in 2015 to €160 in 2016, moving from 56th to 50th place in the rankings (Table 5.8).

Table 5.8: Per Capita Total Sales

2015 2016

Per Capita Sales (€)

Rank Per Capita Sales (€)

Rank

Massachusetts 683 1 732 1

New York 345 7 377 8

France 211 26 220 27

Portugal 211 25 211 29

Ireland 146 56 160 50

UK 155 52 141 62

Belgium 105 74 105 71

Source: La Fleur’s World Lottery Almanac

When focusing on lottery sales, Ireland’s per capita sales grew from €99 to €107 between 2015 and 2016. Notably, lottery sales per capita in Ireland have been higher than in countries such as Portugal, the UK, Belgium and France (Table 5.9).


Table 5.9: Per Capita Lottery Sales

2015 2016



Rank

Lotterywest* 190 1 175 1

Ireland 99 21 107 19

Portugal 92 24 92 21

UK 95 20 83 27

Belgium 81 31 80 28

France 48 51 47 56


* ‘Lotterywest’, which operates in Western Australia, is included for reference purposes.

Ireland’s per capita Scratch Card sales are lower than many other countries and regions, with Italy, France, Portugal and the UK all having higher levels in 2016. Ireland ranked 49th out of the 100 regions, with per capita sales on Scratch Cards growing from €41 in 2015 to €45 in 2016 (Table 5.10).

Table 5.10: Per Capita Scratch Card Sales

2015 2016



Rank

Massachusetts 481 1 505 1

New York 178 7 189 7

Italy 147 10 146 14

France 98 27 104 27

Portugal 103 24 103 25

UK 60 38 58 46

Ireland 41 51 45 49

Belgium 20 69 20 67




Finally, how Ireland compares in relation to sales per capita with countries and states with a similar population was assessed. Sales per capita grew by almost 10% between 2015 and 2016 for Ireland as it overtook Queensland in size (Table 5.11).

Table 5.11: Sales Per Capita (2015-2016) (Countries/States with Population Between 3-5 Million)

2015 2016 Change % Change

Connecticut 295 312 17 5.8%

South Carolina 273 296 23 8.4%

Kentucky 190 207 17 8.9%

British Columbia 184 184 0 0.0%

New Zealand 123 162 39 31.7%

Ireland 146 160 14 9.6%

Queensland 165 159 -6 -3.6%

Minnesota 90 99 9 10.0%

Louisiana 89 97 8 9.0%

Colorado 93 97 4 4.3%



• The National Lottery operates in a dynamic market environment which has 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.

• The total size of the betting and lotteries sector in Ireland was estimated at approx. €5.6 billion for 2016.

• The National Lottery’s sales represented only 13% of this market estimate. Betting activities, while close substitutes for playing the lottery, do not result in the distribution of funds to various social and other community organisations and are likely to have different economic and social impacts on the Irish economy.

80 Notes

81


Notes

82 Notes




Premier Lotteries Ireland, Abbey Street Lower, Dublin 1

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Socio-Economic Impact of the National Lottery

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