Written evidence submitted by the Association of Convenience Stores (ACS)

Future of the National Lottery

1. ACS (the Association of Convenience Stores) welcomes the opportunity to respond to the DCMS Committee’s call for evidence to inform their inquiry into the future of the National Lottery. ACS is a trade association representing 33,500 local shops. Our members include the Co-Op, McColl’s, SPAR UK, Nisa and thousands of independent retailers. For more information about ACS, see Annex A.

Role of Lotteries in Convenience Stores

2. There are 46,262 convenience stores in the UK, employing 365,000 people selling a range of grocery products and providing a number of services to their local communities. The majority of convenience retailers (82%) offer lottery products[1]. By far the most common lottery products offered in-store are for the National Lottery. The National Lottery has proved to be an extremely valuable development for convenience stores, not only bringing new income in the form of retailer commission offered on sales, but also introducing new customers to stores and bringing footfall.

3. ACS is proud of the role that local shops have played in the success of the National Lottery. Retailers have actively promoted the games and taken part in new marketing activity. This has driven sustained growth for the National Lottery which has generated £40bn[2] for good causes. Many of these good causes are in the communities served by retailers selling National Lottery games, which has allowed stores to promote the value of the National Lottery to local customers.

4. More recently, new products including the Health Lottery have entered the market, which work through existing store systems. Many retailers operate the Health Lottery and the National Lottery side by side and this has strengthened retailers’ position in the market, as well as opening up new sales opportunities. Retailers also work with society lotteries and local charity lotteries, but this accounts for a relatively small part of the sector. Society lotteries provide the opportunity for all retailers to offer lotteries as not all retailers can be part of the National Lottery network. However, we do have some concerns about the growth of remote society lotteries as it may displace sales from retailers that offer National Lottery and other society lottery products in-store to online for example.

5. We have set out our position to relevant areas of the operation of the National Lottery licence below.

Minimum Age of Play

6. ACS will be responding to the Department for Digital, Culture, Media and Sport’s consultation on plans to increase the minimum age to play National Lottery scratchcards. While we are still drafting our response to the consultation, we have outlined our position on the minimum age of play below.

7. If the government decides, after careful consideration and the commissioning of new research, that there is evidence of harm on young customers, and that the age restriction for scratchcards should be increased, we will work with retailers to ensure that the change is implemented effectively across the sector. The convenience sector is extremely effective at enforcing age restrictions in store on a wide range of products including alcohol, tobacco, fireworks, and lottery products. We provide comprehensive guidance in our Preventing Underage Sales Assured Advice[3] on enforcing age restrictions, which is approved by trading standards as part of ACS’ Primary Authority Partnership.

8. If the age restriction on scratchcards is moved to 18, we believe that the government should increase the minimum age of play for all National Lottery products to 18. It is important to ensure that there is a consistent message about the sale of lottery products especially for training and communication materials. Having two separate age restrictions within the same product category would not only cause confusion for retailers but it would also cause confusion for customers.

9. This is also supported by ACS’ Voice of Local Shops survey of 1,174 independent convenience retailers which found that 38% of retailers support the existing legal age restrictions for National Lottery products. This is likely due to very few retailers having difficulty enforcing the current age restriction and that their staff members are already familiar with the regulations. However, 34% of retailers supported changing the legal age restriction for all National Lottery products to 18, compared to 4% of retailers who supported changing the legal age restriction of scratchcards to 18 but keeping lottery at 16, and 1% of retailers who supported changing the age restriction for lottery to 18 but keeping the age restriction for scratchcards at 16. The survey also found that 24% did not have an opinion on the age restriction of National Lottery.[4].

Prohibiting Third Party Betting on the Outcome of Non-UK EuroMillions

10. ACS strongly welcomed the government’s decision to prohibit third party betting on Non-UK EuroMillions games through a new licence condition on betting operators. In our response to the government’s consultation on the proposals in 2017, we raised concerns that bets on Non-UK EuroMillions games undermines National Lottery sales, which impacts convenience retailers’ footfall and commission received for the sale of lottery products.

Society Lotteries

11. In our submission[5] to the Department for Digital, Culture, Media and Sport’s consultation on society lottery reform, we called on the government to consider small incremental increases over a long period of time when considering changes to the individual per draw sales limits, individual per draw prize limits, and annual sales limits to ensure minimal impact on lotteries offered in-store. We raised concerns that while in theory, dramatically increasing per draw prize limits for society lotteries could lead to an increase in sales and footfall for retailers, in practice, only a small part of the convenience sector currently offers society lotteries. Instead, dramatically increasing per draw prize limits for society lotteries would increase the draw limits for remote society lotteries, which could lead to displacing sales of lotteries in-store to online.

12. While we welcomed the government’s decision not to increase the annual sales limit considerably to £100m but instead introduce a smaller £50m limit, we still have concerns about the impact the changes to society lotteries’ draw and sales limits will have on the National Lottery. As such, we believe that the Gambling Commission’s evidence on the impact of society lotteries on National Lottery sales should be continually reviewed and remain robust to ensure that the continued growth of society lotteries, in particular remote society lotteries, do not have a detrimental impact on the sale of National Lottery products. We believe it is particularly important to monitor the impact on the National Lottery following the government’s decision to increase the per draw prize and sales limits for society lotteries. We support the Gambling Commission’s calls that that “the effects of these changes should be monitored to ensure that there are no unintended consequences”[6].

August 2019

ANNEX A