TDs have been debating a proposal to ban bookmakers from allowing punters bet on "lottery type games".
It is claimed the games risk "cannabilising" the National Lottery's 'Good Causes' fund by €110m annually.
An increasing number of Irish people are playing what are termed "lottery experience" type games online and in bookmakers' stores.
Some TDs on the Oireachtas Justice Committee, which is debating new gambling legislation, are advocating banning betting on the lottery.
The National Lottery estimate that €400m is being spent on "lottery experience" games outside of the official lottery. If that money was spent on the National Lottery, €110m would go to good causes in areas such as sport and recreation, culture and heritage, the arts and youth clubs health of the community, youth, welfare and amenities, and the natural environment.
A submission from the National Lottery, seen by RTÉ, shows that for very euro spent on the National Lottery, 57 cent is paid out in prizes, 28 cent goes to good causes, 6 cent goes to retailers the remaining 9 cent goes to pay for administration, taxes and towards profit.
28% of spend on the National Lottery games goes back to 'good causes'.
Sinn Féin TD Donnchadh Ó Laoghaire is among the TDs who is advocating for the change.
He tabled an amendment to the new Gaming and Lotteries Bill at the Oireachtas Justice Committee this evening.
He said: "There is about €110m a year which is lost to good causes - sports clubs, charitable and voluntary organisations - from people not playing the National Lottery and instead playing lottery type experience games.
"Most European countries don't allow that. I tabled an amendment for discussion at today's committee meeting so that we can explore that during the committee stage and hopefully move the discussion on and hopefully come to some kind of consensus by the time it comes to report stage."
"The National Lottery's biggest beneficiaries are ordinary sporting clubs, community, voluntary and charitable organisations throughout the length and breadth of this country. €100,000 every day, millions upon millions every year. So it is a loss to them when people instead of playing the National Lottery play some other form of game play and imitiation play."
Today Boylesports Bookmakers issued a staement to say that a person in Donegal won €33,000 on the back of a €1 bet after correctly selecting four numbers in last night's EuroMillions draw.
Lottery type betting is estimated to account for 10% of Irish betting shop turnover and 5% of online betting turnover in Ireland.
The betting industry oppose moves by TDs to ban this type of betting.
In a statement to RTÉ, Sharon Byrne, Chair of the Irish Bookmakers' Association said: "If this amendment goes through it will only serve to extend a monopoly via misplaced legislation. Our product is entirely different to the National lottery as people can bet from 5 cent and upwards on single numbers, right up to 5 numbers, and has been in place for 25 years.
"Our members fund The Dunlewey centre and Gambling Awareness Trust in addition to the nearly €100 million per year in betting duty which is used by the government to fund many things including the horse and greyhound industries."
Fianna Fáil's justice spokesperson Jim O'Callaghan said that National Lottery's central fund should be protected from "offshore, online speculators who are running bets on the outcome of the national lottery. They are entitled to do it but at the moment when you buy a lottery ticket part of it is going to go to the central fund which is of benefit to the public. If we have a drift from people buying national lottery tickets to instead purchasing tickets online, they don't contribute to the central fund."
A number of the TDs, including Fianna Fáil's Jack Chambers were critical that the National Lottery is now controlled by a private "Canadian pension fund."
But opposing the proposal, Fine Gael TD Peter Fitzpatrick said: "These Irish betting shops have been doing this lottery for the past 25 years. An awful lot of jobs depend on them...Next we will be chasing the GAA clubs and the Tidy Towns. It is alright saying that this won't happen. But that is the way things go."
Minister of State David Stanton explained that he has sought legal advice from the Attorney General and the Government opposes the proposals from Mr Ó Laoghaire and Mr O'Callaghan.
Mr Stanton said: "There is an issue that it in accepting this amendment it might lead to further demands from the National Lottery, perhaps seeking to prohibit local lotteries that support sports clubs and community organisations....you could argue that is direct competition to the national lottery."
RGDATA, the retail grocers' trade association that represents over 2,500 National Lottery Retail Agents is on the record as stating to an Oireachtas Committee investigation into the Regulation of the National Lottery that online sites and betting organisations that offered the opportunity to bet on the National Lottery were a "huge threat to the local shops selling legitimate tickets that actually deliver on funding for good causes."
Mr Ó Laoghaire and Mr O'Callaghan withdrew their amendments during tonight's committee stage debate but both have pledged to return to the issue when the new gambling legislation reaches report stage after the Dáil's summer recess.