Committee Reports > List of Committees > Joint > 1990 > Committee on Commercial State-Sponsored Bodies (6th Committee) > Report No. 03 - An Post National Lottery Company

APPENDIX D

OPERATING EXPENSES OF NATIONAL LOTTERY

NOTES

1.Agent Commission/Bonuses

This figure is directly related to sales. Agents received 5% commission on sales up to March 1988, when the rate was increased to 6%. Agents also receive bonuses for prize payment. (e.g. for Lotto 1% of prizes paid; £5,000 (or share to the agent who sells a jackpot-winning ticket).

2.Printing/Marketing/Distribution

The 1987 figure was higher than 1988 because of the higher level of Instant Ticket sales in the launch year. The 1989 figure shows a 4% increase over 1988.

3.On-Line Facilities and Services

This cost includes the fee paid to GTECH (Ireland) in respect of the contract for the facilities management contract for the supply of services and facilities for on-line games. This fee is directly related to Lotto sales. The percentage increase in 1989 over 1988 is 144% while the equivalent increase in on-line sales was 196%.

The second element in this cost is the rental from Telecom Eireann of telecommunication lines and facilities for the on-line network to support Lotto.

4.Administrative Costs

These include wages, salaries, accommodation, travel, draw costs, An Post services, and other costs. The 1987 figure was in respect of 9 months operations. This would give an annualised 1987 cost of £4.4 million. In this context the annual increase in Administrative Costs was 5% in 1988 and 9% in 1989.

5.VAT

As the Company is not registered for VAT, it must absorb VAT charges in its operating costs. These amounted to the following: