Government likely to face pressure for crackdown on ‘synthetic lotteries’

The Government is expected to come under pressure to crack down on so-called "synthetic lotteries" after Australia last week moved to ban third-party betting on national lottery games.

Following a sustained campaign by newsagents, the Australian government announced it would prohibit lotto-betting firms such as Lottoland and Jackpot. com, which the National Lottery here has described as "parasites", from taking bets on lotteries there.

These new industry disruptors are threatening traditional lotto monopolies all over the world by allowing gamblers to bet on lottery outcomes without actually buying tickets for any draw. In some juridictions, they have cannibalised up to 20 per cent of the market.

They cover the cost of big payouts through a complex formula of hedging and insurance.

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There are said to be up to 15 such firms operating in the Irish market and the biggest one, Gibraltar-based Lottoland, allows customers to select numbers for the EuroMillions draws at a reduced price.

In the UK, bet-on-lotto operators have, from the start, been prohibited from taking bets on the national lottery there and will, from next Thursday, be banned from taking bets on the EuroMillions draw.

Judicial review

However, Lottoland and three others have formed an alliance, which may seek a judicial review of the UK government’s decision on the EuroMillions draw.

The operator of the National Lottery here, Premier Lotteries Ireland (PLI) is understood to have met senior officials, including Minister for Finance Paschal Donohoe, to articulate its concern about the impact on good causes should these firms be allowed unfettered access to the Irish market.

"The National Lottery is aware of and is monitoring the developments surrounding the activities of off-shore operators in other jurisdictions such as Australia, and the impact on their lotteries," a PLI spokeswoman told The Irish Times.

“As stated previously, the National Lottery is concerned at the rapid growth of unregulated, off-shore, bet-on-lottery operators in Ireland over the last 18 months,” she said.

“The ‘parasitic’ activities of these lotteries pose a serious threat to the National Lottery, and therefore the return to good causes, given the speed with which they adversely impacted on state lotteries in Australia and elsewhere,” she said.

Traditional player base

It is not known how much of the National Lottery’s traditional player base is being lost to these operations, but Lottoland said recently it had seen a 200 per cent jump in customer sign-ons last year.

“We’re fighting the proposed legislation in Australia as it is clearly misguided and unnecessary in a market that is unique and complex,” a Lottoland spokesman said.

“Having said that, we are committed to continuing to work with regulators and all political parties to reach a satisfactory pro-consumer outcome on the issue, particularly for our more than 650,000 registered who enjoy legal and legitimate betting on a range of global lotteries,” he said.