Reductions in lotto pay-outs are driving players to illegal gambling rackets, the Lotto Receivers’ Union has warned.

The terms and conditions of the national lottery stipulate that prize money cannot be higher than 70 per cent or lower than 30 per cent of sales.

In cases when prize money falls above or below this threshold, the lotto operator, Maltco Lotteries, adjusts prize money accordingly.

Since these thresholds were introduced in July 2007, prize money has been reduced 33 times and raised 28 times.

Maltco has had an exclusive licence to operate all national lottery games in Malta since 2004. Its agreement with the government expires in mid-2012.

The LRU called into question Maltco’s discretionary power in determining lotto pay-outs, describing its current system as a “highly arbitrary” one that paid no attention to the consequences.

The maximum and minimum thresholds, the LRU said, were originally introduced in July 2007 on a six-month trial basis.

Well over four years later, the thresholds were still in place, while both the authorities and Maltco continued to ignore the public’s complaints, it said.