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Rehab Lottery Pays One Cent to Charity for Every €4 in Tickets Sold

When I first heard the figure, I thought my ears were playing a trick on me.

What was that?  For every €4 spent on Rehab lottery cards, the charity gets one cent.  Could that be right?

As it turned out, that was exactly what Alan Shatter told the Dáil.  In what must be the understatement of the century, he noted drily that the profit ratio seemed disproportionate.

Disproportionate indeed.  Every so often, I have a quick chat with one of our occasional financial contributors, so I ran it by him.

What do you think of this Rehab thing, Herr Professor?

It’s a bit surprising, he said.  Actually, that’s not what he said, but it amounts to the same thing, more or less, minus the expletives.

Four million in sales produced a profit of €9,500.  Isn’t that as close to zero profit as makes no difference?

Pretty much.   

Zero tolerance, as you might say, if you were manufacturing microchips or surgical lasers.  What would be typical for a charity?
Most well run charities are at about 10-15% costs. Trócaire, Médecins Sans Frontières.  And they have to hire planes and bodyguards and lads to beat off the snakes with.

You’re saying their overheads are 10-15%?

About that.

But Rehab’s costs are, wait, let me work this out, 99.75%

There was a brief scratching sound and a rustle as the Prof re-lit his pipe and adjusted his smoking jacket.  Indeed, he murmured. Room for improvement there.

Now, I’m normally good with numbers, but this wasn’t making sense.  I needed a chart to show the comparison between the Rehab lottery profits and its overheads.  Here it is.

Hmm.

 

Rehab lottery overheads

 

7 replies on “Rehab Lottery Pays One Cent to Charity for Every €4 in Tickets Sold”

Bock, do you have a break down of the costs? like, advertising 10%, salary ‘top ups’ 50% etc…. otherwise it looks just like a rather big cheese.

It sounds about right judging by recent events. When you consider inflated salaries, flash company cars, expensive meals, junkets around the world, trips to big sporting and national events, spending money and allowances, bonuses and the list goes on and on and on. I’m amazed it’s even one cent, I’m surprised some chief executive hasn’t slurped up that too. And guess what, they’ll tell you they are worth every cent!!

Kevin,

According to Shatter: “Of the €9,452 profit, €3,969,000 was earned, prizes were worth €2,611,000 and costs were €1,348,000, the Minister said.”.

From Rehab:
Mr Maguire admitted “profits have been low” and provided the Irish Examiner with a limited breakdown of the €1.3m in scratch card costs, saying 12.5% went to retailers, 5% on printing tickets and distribution, 60% in prizes, and the other 22.25% in “overhead costs”.
http://www.irishexaminer.com/ireland/rehab-shatter-gets-full-audit-every-year-256247.html

Looking around for typical cost breakdowns I found this on Missouri’s Lottery site:
Does the Lottery keep most of its proceeds?
From every dollar spent on a Lottery ticket, more than 95 cents is returned to Missouri residents: an average of 64.7 cents goes back to players through prizes, 24.5 cents goes to Missouri’s public education system and 6.2 cents is earned by retailers who sell Lottery tickets. Just 4.2 cents of every dollar goes to pay administrative expenses including advertising, ticket printing and computer system costs.
Missouri does “draw games” as well as “scratchers”

No doubt it’s easier to spread administrative costs across a large state lottery than one with €4 million in takings, but if that’s the problem, all the more reason to wind it up

Bock,

Given the relative scale of the two lotteries, it’s probably not. It was intended as an a example of what the cost percentages on a typical large-scale lottery might look like.

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