Profits at the National Lottery fell last year after a drop in sales which was blamed in part on the introduction of the euro, it has emerged.
It is understood that financial statements from the An Post National Lottery operation show a 1.6 per cent drop in the company's surplus last year to €172.9 million. The accounts were signed off by the Cabinet at its meeting on Tuesday morning.
After what was described as a difficult year for the lottery, the fall in profits suggests that less money will be available for charities. Funds from the lottery are dispersed to health and social welfare projects and to youth, sport and recreation bodies. Arts and cultural schemes are also beneficiaries, as are Irish-language programmes.
The lottery business has matured in recent years, with one study in 2001 showing that sales fell for the first time in 2000.
The lottery company has traditionally developed new games to stimulate demand, branching into television, and increasing the number of flagship Lotto games.
Sources said the fall in profits last year reflected a decline in ticket sales, although the exact value of sales was unclear last night. "I think it would have been a fair amount," said one source.
It is understood that the company took remedial action during the year to arrest the fall and sources said that sales recovered as the year continued.
While sales have fallen in previous years and profits have sometimes been static, the fall in profits is believed to the first reported by the company. The results are expected to be published this afternoon after the company's annual general meeting. A National Lottery spokeswoman would make no comment yesterday.
In papers presented to the Government in recent weeks, the company is believed to have blamed the fall in sales to the introduction of the single currency.
The company was obliged to change the price of tickets after the changeover, causing confusion among players of its games. But it generally favours round sums when pricing tickets, leading to difficulty with an exchange rate which equated £1 with €1.27 and €1 with 78.9p.
The company is also thought to have cited the economic downturn as a factor, as well as the changeover last year to a new contract with its long-standing technology partner, the US group G-Tech.
Two other companies tendered for the contract in a competition which G-Tech ultimately won.
The changeover occurred in the year after An Post won a new contract to operate the lottery company.
The business is believed to generate about €3 million annually for the State postal company, which is thought to have made a day-to-day loss last year of €17 million.
New equipment was required to electronically transfer information between retail outlets and lottery headquarters in central Dublin.
