Irish charity lottery operator Rehab has launched a legal battle against the National Lottery in that country, arguing that its monopoly position contravenes European law.
Rehab has seen its lottery market share decline since the introduction of the National Lottery in Ireland, and last Friday – one day after a new licence was awarded to An Post and Camelot (the latter which also runs the UK’s National Lottery) – lodged papers in the Irish High Court arguing that the National Lottery is in violation of competition rules.
Irish national newspapers have reported that Rehab is seeking compensation to the tune of €1.5bn - €600m for lost revenue due to the limits on charity prizes and a further €900m following the new licence for future loss. A spokesman for Rehab would not comment on this, describing such reports as speculation.
It is understood that Rehab hopes the court will rule that the National Lottery, which similar to the UK holds an effective monopoly role in the market, is in violation of European Union competition rules.
Many European countries have monopoly lottery operators, used to either fund the state or national charities, and the outcome of this legal challenge stands to have an impact on the status of national lotteries across the European Union.
Rehab says that in 1987, before the introduction of the National Lottery, it held 25 per cent of the lottery market; in 1989 - two years after the launch of the National Lottery – this fell to 5 per cent. Now Rehab accounts for 1 per cent of the total Irish lottery market. Irish charitable lotteries are restricted to weekly prize draws of €20,000.
Fears of ‘complete elimination of charities from lottery marketplace’
Separately Rehab Group has today made representations to the Irish Committee on Justice, Defence and Equality against proposals to abolish the Charitable Lotteries Compensation Fund, established in 1996 to compensate charity lotteries for the impact the National Lottery has had on their revenues.
Rehab Group chief executive Angela Kerins told the Oireachtas Committee: “We believe that the implementation of current proposals would result in the complete elimination of charities from the lottery marketplace, because of the preferential and discriminatory position afford to the National Lottery.”
Rehab argues that a “complete removal of the cap on prize funds would be the only correct and legal approach” following any abolition of the compensation fund.
In a statement released today the charity group said: “Unfortunately it is the case that in the absence of a fair and reasonable charitable lottery compensation fund and in light of the current proposals to continue to cap prize funds for charitable lotteries, the future of charitable lotteries is very bleak. It is likely that many of the legislative proposals will quickly become obsolete as this anti-competitive legislation fully eliminates the ability of charity lotteries to compete in the marketplace.”
