National Lottery chief is facing down competition with bigger prizes, writes Emmet Oliver
Lotteries the world over are driven by hype and despised by statisticians. The chances of winning each week are so mathematically remote that few people bother pondering the ludicrous odds.
But for a lottery to succeed, mathematical concerns must be put aside and dreams put in their place. The idea that "it could be you", however long the odds may be, is the core message the National Lottery seeks to transmit to the public every week. In this it has largely succeeded since its inception in 1987. However, while there is a dreamy side to the Irish character, the harder edges should not be ignored.
The man charged with keeping the dream alive in changing economic times is Dermot Griffin, National Lottery managing director. He says the hard edge is in danger of winning out over the dreams of the average lottery player. "Our lottery sales over the last number of years have been declining somewhat and an issue for us is the rise in house prices and the fact that people's standards of living have risen so much."
He says players and the public in general are sending an unambiguous signal to the company "A million euros doesn't cut it anymore. Give us a decent jackpot to play for".
Put simply, Irish people are not prepared to settle for jackpots that don't have the potential to transform their lives financially, he adds. While €1 million remains a huge amount of money, it lacks the financial force it did a decade ago, particularly when whole swathes of Dublin have houses worth significantly more than €1 million. Lottery players still like to dream, but very much on a bigger scale.
It might seem strange then that the man heading up the company is a 44-year-old accountant who started his career in the starchy world of KPMG, where mathematical and accounting certainties were to the fore.
Griffin says the idea that someone buying a lottery ticket in their newsagent could have their life changed forever remains the key pitch of the company he leads. But inevitably, considering his background, he accepts that dreams are not enough and even in something as capricious as lotteries, money talks. "Lotteries are about people's dreams. 'I buy this ticket on a Saturday and sod them on Monday, because I don't have to work anymore if I win this thing'. That is the sort of thing we need to get back to." Bigger prizes are the order of the day as a result, starting this week with a revamped lottery draw designed to provide these bigger prizes and more individual winners.
Griffin himself was an occasional lottery player before joining the company. "I didn't play religiously every week, but I played."
His main playing interest nowadays is Leeds United football club, currently nestling at the foot of Division One.
From Sutton in Dublin, Griffin, is an advocate of seeing a business at shop-floor level.
"I am very conscious of getting out. Quite a number of times now I have been out sitting in the car with the sales reps, going around shop to shop. Every visit you pick up a different angle. That is where it all happens. You can sit in head office and come up with all the plans you want, but if they don't work out in the field, you can forget about it".
Having worked in Eircell in the early 1990s as chief financial officer under Stephen Brewer, Griffin knows how carefully constructed forecasts can be rendered redundant by rapid change in the market.
He remembers this happening at Eircell: "Its funny when you think back about those days. I remember preparing a five-year business plan in 1995, we were talking about having maybe 250,000 customers by the end of the century and we ended up with a million. Even submitting a figure of 250,000 to the board then was very much a case of 'where are all these people going to come from?' But it just rapidly took off".
When Vodafone took over Eircell in 2001, Griffin stayed on at Vodafone Ireland, first as finance director, then business development director and ultimately as commercial director.
However, in recent years, he realised that to go further within Vodafone would require moving abroad and he did not want to uproot his family. Consequently he was looking for a new role, preferably as chief executive or chief operating officer. In April 2005, he got his chance at the National Lottery when he became chief operating officer working alongside Ray Bates, the chief executive. When Bates decided in late 2005 to move on, Griffin went for the top job and has been in the role since the start of the year.
The sense at this stage is of a man more comfortable in the financial engine room than at the photo opportunities so beloved of his predecessor. "My own style is about having a strong management team," he explains. "Yes, there'll be pictures in the paper, but I see my remit as taking the business to the next level".
"While Ray was great in terms of being a figurehead, the National Lottery has to to be able to stand up as an organisation in its own right. I don't think I'll be here in 18 years time," he says firmly. As a result he talks about "succession planning" and passing it over after a few years to somebody else.
"I don't think anyone should stay in a job for 18 years, I have a contract for five years. Part of my job will be to leave a management team behind, so the lottery isn't depending on me".
While the National Lottery is just a harmless flutter to most of its players, Griffin sees it as an evolving business and one with true national scale.
"Last year we turned over €616 million and we'll do more this year. It puts us in the top 100 companies in the country," he points out. While scale is important, the real concern for Griffin and the public is where does the money go? He explains that for every euro spent on the lottery and associated games, 52 per cent goes on prizes for players, 32 per cent goes to good causes and the balance goes on administrative expenses.
On the surface this seems a reasonable split, but the allocation of funds is coming under pressure. Bigger prizes may mean pressure to reduce the amount set aside for good causes. "It may have to tweaked slightly. We will probably increase the prize pool for lotto by 2 per cent, but in terms of the magnitude of the amount of money for good causes, that should grow too. You will probably find there will be some percentage off our administrative costs".
The lottery is still based around the 3,500-strong network of newsagents around the country who work off a 6 per cent commission on their lottery sales.
While this network has served the company well, the UK lottery has started offering its games online and Griffin accepts that changes are coming in this area soon. In fact, it is surprising it has not happened already, but Griffin insists the lottery has not been slow to get online.
"It is access to a new type of market and we will certainly be in that space once we are satisfied that all our controls are in place. Its part of our medium-term strategy. Its been on our agenda for quite a while, we have advanced it quiet a length. It's not our core business at this particular point in time and we are mindful of making sure that we are the tightest we can be in terms of safeguards. But it is part of our plans, so at the right time we will go for it".
He denies that the frenzy every Friday night surrounding Euro Millions has reduced the appeal of the National Lottery. "A lot of people play both. A lot of people see Euro Millions as a longer odds game. It's Friday, it's a different day. So you get a lot of people playing both games. It hasn't materially affected our lottery sales," he claims.
He says the win by Dolores McNamara of €115 million certainly helped to raise the profile of Euro Millions, but people realise the odds in Ireland remain relatively encouraging. "It remains almost like a licence to dream," he says.
Factfile
Name: Dermot Griffin.
Age: 44.
Family: Married with four children. Lives in Sutton, Dublin.
Title: Director of the National Lottery.
Education: Chanel College Secondary School Coolock Dublin. B.Com from University College Dublin.
Career: Worked initially with KPMG and later Eircom and Eircell. Prior to joining the National Lottery he worked with Vodafone Ireland where he was commercial director leading the sales and distribution activities of that company. He previously held roles as business development director and finance director.
Hobbies: Football and golf. Passionate supporter of Leeds United football club.
