Supplementary written evidence submitted by the People’s Postcode Lottery
29 April 2022
People’s Postcode Lottery welcomed the recent opportunity to provide oral evidence as part of the ongoing inquiry ‘What next for the National Lottery?’.
Further to this, we provide the following written submission giving background on People’s Postcode Lottery as an operator; the charity lottery sector and the complimentary basis of our interaction with the National Lottery; insight into the legislative opportunities and constraints that impact our ability to maximise returns to good causes; and the importance we place on player protection, despite the charity lottery sector being widely recognised as low risk from a problem gambling perspective.
People’s Postcode Lottery is a not for commercial gain External Lottery Manager (ELM) owned by a social enterprise and licensed by the Gambling Commission. We manage lotteries with the sole purpose of raising funds for good causes. Charities are at the heart of everything we do, and our players now raise over £14 million for good causes every month. As of 2021, we act as ELM for 20 Postcode Trusts (each a registered independent charity) who distribute funds raised from their lotteries to other charities and good causes.
Since People’s Postcode Lottery launched in 2005, players have raised over £900 million for over 9,500 good causes, including many local community organisations across Britain.
Savings resulting from the UK Government’s 2020 charity lottery reforms have allowed PPL to increase our percentage return to good causes to 33% per ticket – up from 32% prior. This additional 1% delivered some £5.5m extra for charities last year.
The charity lotteries we manage have together supported charities and good causes in a wide range of sectors. These include over 80 larger charities working in the areas of:
The type of funding provided by the Postcode Trusts is very important to charities, with the majority focused on long term, unrestricted funding. This means that charities can use funding for core costs or indeed for further fundraising – using these funds to leverage more income. This flexibility can complement project-based funding such as that from the National Lottery Community Fund.
There is widespread recognition from the Gambling Commission, the Government and academia that charity lotteries constitute a low risk from a problem gambling perspective. Despite this, we take our responsibilities in this area very seriously. Committed to evolving our safety protocols in line with changing industry standards, our player protections are covered further Section 7 of this response.
People’s Postcode Lottery is fully supportive of the National Lottery and embraces our status as a fundraising stream that complements, rather than competes with, the unparalleled scale of its charitable fundraising. Indeed, it is the case that a number of the charities our players help to fund – such as Girlguiding, the British Red Cross and respected cancer charity, Maggie’s - also receive funding from the National Lottery. As noted in Section 2 above, the distinct, unrestricted and flexible nature of our funding in many cases delivers impact alongside the more traditional, project-based funding offered by National Lottery distribution bodies.
A wide and conclusive body of available evidence demonstrates the complementary nature of both sectors, including the Gambling Commission’s official industry statistics. Following years of concurrent growth, the Commission’s most up to date published statistics conclude that both sales and returns to good causes for the National Lottery and Charity Lottery sector are at record levels.
The Gambling Commission confirmed to the Select Committee directly, as recently as 22 July 2019, when asked about the impact charity lotteries have on the National Lottery that: ”We have given the advice we gave around the recent society lotteries consultation, where our judgement is that that does not infringe on the unique features of the [National] lottery, like life changing prizes.”
This followed three separate investigations by the Commission in 2012, 2015 and 2017 – the latter reinforcing earlier findings that there is “no statistically significant effect of Charity Lotteries affecting National Lottery sales.”
The concurrent success of both the Charity Lottery sector and the National Lottery chimes with the Government’s own commitment to see both lottery types thrive.
Just last month – as part of its one year review into society lottery sales and prize limits – DCMS itself confirmed that despite an increase in charity lottery annual sales limits – the unique position of the National Lottery continues to be maintained.
Moreover, there are numerous differences between charity lotteries and The National Lottery, in terms of regulation, operation and motivation to play, which provide for the National Lottery’s monopoly status and the accompanying operation of charity lotteries, which themselves existed for many decades prior.
Legislation: The National Lottery is regulated under the 1993 National Lottery etc Act and the National Lottery Act 2006, whilst charity lotteries are regulated under the 2005 Gambling Act.
Sales limit: There is no limit on National Lottery sales, whilst there are strict limits on charity lottery annual and per draw sales.
Prizes: There is no limit on National Lottery prizes, whilst there is a strict limit on charity lottery prizes, at a level which is much lower than that of the Lotto and Euromillions prizes.
Geographic area: The National Lottery operates in Great Britain, Northern Ireland and the Isle of Man, whilst charity lotteries licenced under the 2005 Gambling Act cannot operate in Northern Ireland or the Isle of Man.
Motivation for playing: People play charity lotteries for a variety of reasons. However according to the Gambling Commission charitable giving is a greater motivation for players of charity lotteries while a life-transforming win is a greater motivation for players of the National Lottery. “Of those who bought tickets for a charity lottery or other lottery, 55% reported gambling to support good causes. This compares to 15% who bought tickets for the National Lottery draws, and 5% of those who purchased scratchcards”.
Committee will be aware of the charity lottery reforms based into law by the Government in July 2020, in which charity lottery annual sales limits rose from £10 million to £50 million and per draw limits rose from £4 million to £5 million.
In March 2022, DCMS reported the findings of its one year review into charity lottery sales and prize limits, concluding that “…the increased limits are bedding in well and are beginning to have the intended effect of allowing the society lotteries sector to grow and return more to good causes, whilst also maintaining the unique position of the National Lottery.”
These important reforms have proven a success for People’s Postcode Lottery, thus far delivering:
An increase in the percentage return to good causes Administrative savings realised through charity lottery reform - coupled with continued sales growth – means each ticket sold now returns 33% to good causes, up from 32%. Percentage spend on costs has decreased from 28% to 27%.
A simplified structure, reduced costs and regular funding As well as providing greater support for charities, the reforms have had a positive impact on People’s Postcode Lottery, allowing a reduction in the number of lotteries we manage from 58 to 20, as each lottery can now raise more funds.
This has reduced bureaucracy, freeing up even more money for funded charities. This simplified model is easier to understand, including for our players. It has also enabled a simplification of the funding distribution process for good causes – most beneficiaries now receive regular, quarterly payments.
£31 million in one-off Extra Awards to 61 charities in 2021 Our simplified structure enabled 61 regular beneficiary charities each a share of some £31 million in one-off Extra Awards in 2021.
Double the funding for small causes The amount available for grassroots community groups has more than doubled, from £8.5 million in 2019 to around £17 million from 2021. Charity lottery reform has also made applying for community programmes funding clearer and less confusing for smaller charities. This is a benefit for local good causes in every constituency in Britain.
Despite the positive outcomes noted above, the 2020 charity lottery reforms fell short of introducing the £100m annual sales limit backed by the charity lottery sector, and the Government itself, who highlighted a £100 million annual sales limit as its own ‘preferred option’. Supported charities themselves have - and continue - to support a £100 million annual sales limit, with approximately 100 of Britain’s large and medium charities most recently writing to the DCMS Secretary of State on the issue in February 2022 (APPENDIX 1).
Given the strength of evidence (noted above, Section 2) demonstrating the co-existence of both lottery types, it remains of profound disappointment to People’s Postcode Lottery that the Government opted to proceed with a more cautious increase in charity lottery sales limits back in 2020.
The way by which charity lottery limits interact with our growing player base means current annual sales limits will again begin to restrict the amounts that can be raised for good causes, as individual lotteries are again faced with taking preventative action to remain within the limits – ie through a return to ever greater numbers of licences and the high costs and bureaucracy attached to this.
A £100m limit would provide charities greater certainty and continued opportunity to access vital funds further into the future. Given it took eight years for the partial 2020 reforms to be delivered, it is vital the charity lottery reform process be continued.
The only opposition to the Government’s £100 million ‘preferred option’ arose on behalf of Camelot – who based their concern on an unpublished report by Frontier Economics, which stands in stark contrast to the objective and published evidence, including that from the Gambling Commission.
We at People’s Postcode Lottery hope that the recent announcement of a new National Lottery licencee will provide an opportunity for the National Lottery and the charity lottery sector to work more constructively in the future in order to fully maximise the amount our respective sectors can generate for good causes – all at no cost to the public purse.
People’s Postcode Lottery sales are either via phone or online. Customers sign up to a monthly Direct Debit or PayPal subscription via our website or by phoning us. 20 draws are conducted each month, usually all on the first Wednesday of the month. Winning postcodes resulting from these draws are announced on a daily basis in accordance with the Prize Draw Calendar shown on our website.
We believe our game to be the only gambling product where the number of tickets a player can purchase is limited by design. An overwhelming majority of our players – some 89% - hold just one ticket, at a cost of £10 per month. A player can play with a maximum of six tickets, at a cost of £60 per month.
Our online presence is therefore very different to that of online gambling, where large sums can be staked and lost quickly. Nonetheless, we treat our responsibilities around player protection and our institutional commitment to social responsibility with the utmost seriousness.
Protections incorporated within the People’s Postcode Lottery model include:
The recognised low risk of charity lotteries (referenced in section 1) suggests that these measures are effective in protecting against gambling harms.
The Rt Hon Nadine Dorries MP
Secretary of State for Digital, Culture, Media and Sport Department for Digital, Culture, Media and Sport
100 Parliament Street London, SW1A 2BQ
Friday 14th January 2022
Dear Secretary of State
We are aware that your department is currently considering whether the charity lottery reforms which came into law in March 2020 have been a success.
As a group of 97 charity leaders whose organisations have benefitted hugely from charity lottery fundraising, we write to emphasise our view that the changes have indeed been a success and we thank the Government for implementing them.
To date, our charities have together received over £500 million from players of People’s Postcode Lottery - a truly transformational amount of money which has helped our charities to thrive and grow.
From our perspective we believe that the charity lottery annual sales limit being raised to £50 million and the per draw sales limit being raised to £5 million has already clearly been a success.
The increases in the sales limits have led to several positive changes that have directly benefited our charities, these include:
As you will be aware, the ongoing pandemic has created an incredibly difficult financial situation for many charities across Britain. The regular and reliable funding from players of People’s Postcode Lottery during these times has, in many cases, allowed charities to survive in this incredibly turbulent period we find ourselves in. Quite simply the increased funding, thanks to charity lottery reform, could not have come at a better time for us.
We are aware that pre-reform there was a question as to whether charity lottery reform could impact the National Lottery. Many of our charities also receive funding from the National Lottery,
something that we are hugely grateful for. However, it has always been very hard to see how increasing the charity lottery sales limits, which are behind-the-scenes non-player-facing changes, could impact sales of the National Lottery. Pre-reform we were reassured by the extensive studies undertaken by the Gambling Commission on this point, which forecast no impact. With the reforms now in place for well over a year we are further reassured to note that National Lottery sales and funds to good causes have risen over the last year according to Camelot and Gambling Commission statistics. Indeed, with funds to good causes from lottery fundraising now at an all-time high it is clear that charity lottery reform has only had a positive impact on charity finance.
In April 2019 many of the charities who have signed this letter wrote to one of your predecessors as Digital, Culture, Media and Sport Secretary, the Rt Hon Jeremy Wright QC MP, asking him to raise the charity lottery annual sales limit to £100 million.
We were pleased that in its July 2019 report on the Society Lottery reform public consultation, the Government stated its sympathy to a £100 million annual sales limit and its ambition to move to introduce an operator licence allowing £100 million of annual sales.
Given the already evident success of the move to a £50 million annual sales limit we ask that the Government takes action to proceed with this next element of charity lottery reform. This will enable further reductions in bureaucracy and administration costs and further assist charity lotteries and the charities they support, such as those we lead.
We look forward to hearing from you on this issue.
Jean-Michel Grand Executive Director
Action Against Hunger
Frances Longley Chief Executive ActionAid UK
Chief Executive Officer African Parks
Charlie Hay CEO
Kate Lee CEO
Camilla Knox-Peebles Chief Executive
Amref Health Africa UK
Christophe Cox CEO
Lynn Perry MBE & Michelle Lee-Izu Co-Chief Executives (Interim)
Peter Laurie Chief Executive
Battersea Dogs & Cats Home
Alison Tweed CEO
Book Aid International
Delyth Morgan CEO
Breast Cancer Now
Mike Adamson CEO
British Red Cross
Richard Parry Chief Executive
Canal & River Trust
Laurie Lee CEO
CARE International UK
Executive Director of Policy and External Affairs
Charles Darley Chief Executive Cats Protection
Mary Glasgow CEO
Leigh Elliott CEO
Children North East
Global Director of Development ClientEarth
Matthew Downie Chief Executive Crisis
Neeraj Sharma CEO
Fiona Petit CEO
Mike Thiedke CEO
Owen Sharp CEO
Nick Barley CEO
Edinburgh International Book Festival
Frank Fletcher CEO
Ellen MacArthur Cancer Trust
MiriamTurner/Hugh Knowles Co-CEOs
Friends of the Earth
Dr Richard Dixon Director
Friends of the Earth Scotland
Angela Salt CEO
Mike Davis CEO
Béatrice Butsana-Sita CEO
John Sauven Executive Director Greenpeace
Tom Wright CBE CEO
Chief Executive Officer
Helen Bamber Foundation Group
Kenneth Roth Executive Director Human Rights Watch
George Graham Chief Executive Humanity & Inclusion
Niels Meijer Director/CEO
Johan Cruyff Foundation
Allison Ogden-Newton OBE CEO
Keep Britain Tidy
Dr Lucy Peake CEO
Martha Spurrier Director
Mark Curtin CEO
Dame Laura Lee DBE Chief Executive Maggie’s
Dr Lindsey MacDonald Chief Executive
Sandy Luk CEO
Marine Conservation Society
Daniel Adams Executive Director
Vickie Hawkins Executive Director
Médecins Sans Frontières UK
Dr Claire Guest Chief Executive
Medical Detection Dogs
CEO and Artistic Director
Midlands Arts Centre
Jo Youle CEO
Sir John Leighton Director-General
The National Galleries of Scotland
David Anderson Director General
Amgueddfa Cymru/ National Museum Wales
Dr Christopher Breward Director
National Museums Scotland
Hilary McGrady Director-General National Trust
Philip Long CEO
National Trust for Scotland
Hugo Templeman CEO
Ndlovu Care Group
Steve Beharall Head of Foundation
Newcastle United Foundation
Sir Peter Wanless CEO
Dhananjayan Sriskandarajah Chief Executive
Dylan Mathews Chief Executive Peace Direct
Catherine Roche CEO
Rose Caldwell CEO
Plan International UK
Interim CEO & PWCF Finance Director The Prince of Wales's Charitable Fund
Trustees and Executive Team
Director General PDSA
Meryl Davies Chief Executive Re-engage
Ed Bracher Chief Executive
Riding for the Disabled Association
Matt Stringer CEO
Regius Keeper (Chief Executive) Royal Botanic Garden Edinburgh
Richard Deverell Director
Royal Botanic Gardens, Kew
Catherine Johnstone CBE Chief Executive
Royal Voluntary Service
David Field CEO
Royal Zoological Society of Scotland
Gwen Hines CEO
Save the Children UK
Sir Ian Blatchford
Director & Chief Executive Science Museum Group
Caroline Harper CEO
Nicola Killean CEO
Dougie Stevenson Chief Executive Officer
Darren York CEO
The Conservation Volunteers
Tanya Curry Interim CEO The Ramblers
Dr Jane Davis
Dr Jane Davis
Founder and Director of Literature The Reader
John Prendergast Co-Founder
Grants and Finance Director Their World
Antonio Zappulla CEO
Thomson Reuters Foundation
Sarah Ebanja Chief Executive
Tottenham Hotspur Foundation
Jon Sparkes Chief Executive
UK Committee for UNICEF (UNICEF UK)
Leonie Bell Director
Paul Reddish Chief Executive
Rob Williams OBE CEO
War Child UK
Tim Wainwright Chief Executive WaterAid
Sarah Pugh Chief Executive Whizz-Kidz
Chief Operating Officer
Wildfowl & Wetlands Trust
Craig Bennett Chief Executive The Wildlife Trusts
Laurie Adams CEO
Women for Women International
Darren Moorcroft CEO
Tanya Steele Chief Executive WWF
David Sharrod Chief Executive
Yorkshire Dales Millenium Trust
Rachel Kirby-Rider CEO
Young Lives vs Cancer
Matt Griffiths CEO
Dominic Jermey CVO, OBE Director-General
Zoological Society of London
Mr Chris Philp MP, Minister for Tech and the Digital Economy, (including lottery policy). Mr Nigel Huddleston MP, Minister for Sport, Tourism, Heritage and Civil Society.
 People’s Postcode Lottery is the trading name