Written evidence from the Lotteries Council

  1. The Lotteries Council represents hundreds of charities and good causes across the country who operate society lotteries to raise funds to support their work. 

 

  1. We welcome this inquiry by the Public Accounts Committee which comes in response to the National Audit Office (NAO) investigation:’ National Lottery funding for good causes’, which was published on 13th December 2017.

 

  1. As our membership includes many charities who have received funding from the National Lottery we share the concerns expressed by MPs about the decline in National Lottery funding in the most recent financial year.

 

  1. For many years The Lotteries Council have expressed the opinion that fundraising by society lotteries complements the fundraising by the National Lottery.

 

  1. We were thus pleased to note that the National Audit Office investigation report states on page 7 that “The Department has stated that it is not aware of any evidence of significance substitution of sales between the Lottery and society lotteries to date.”

 

  1. This backs up the findings of numerous other pieces of research.
  2. A 2012 report by NERA Economic Consulting, commissioned by the Department of Culture, Media and Sport and the Gambling Commission, did not find evidence to support any impact of society lotteries on the National Lottery. Instead it found the impact of deregulation of society lotteries would likely “be an increase in total proceeds available for good causes”.

 

  1. A May 2013 report by nfp Synergy, noted that “We believe that we can create regulations that minimise the regulatory burden for all organisations using society lotteries (without any conceivable impact on the National Lottery) and maximise the amount of money that is raised for good causes.”

 

  1. A February 2014 report by the Centre for Economic and Business Research (CEBR) found, “overall, there is little evidence to support the notion that society lotteries undermine the National Lottery” and “if regulations were to be relaxed, the potential increase in society lottery-donated funds to good causes would, in all likelihood, complement rather than detract from those provided by the National Lottery”.

 

  1. The March 2015 Culture, Media and Sport Committee report on Society Lotteries said: “We do not consider that there is any indication that the [National] Lottery is being significantly affected by any of the society lotteries currently operating.” 

 

  1. Speaking in a Westminster Hall debate on Society Lotteries on 12th December 2017, Sport and Civil Society Minister, Tracey Crouch MP, echoed the findings of the National Audit Office investigation stating: “ We know that the two sectors offer different and distinct propositions to players. The National Lottery enables players to support a wealth of good causes in the hope of winning a life-changing prize, while society lotteries focus for the most part on affinity with specific causes and are subject to limits on their annual and per draw sales and their maximum prize. For that reason I do not believe there has been significant competition between the two sectors up to now”.

 

  1. These different pieces of research are also backed up by the Gambling Commission statistics which show National Lottery funds to good causes and society lottery funds to good causes have both risen for most of the last decade.

 

  1. In addition to the findings of the National Audit Office investigation the most recent dip in National Lottery income is, according to comments by both the Gambling Commission and Camelot, believed to be because of changes by Camelot to the Lotto draw.

 

  1. In February 2017 the Gambling Commission said: “Despite remaining the most popular gambling activity there has been a continued decline in participation in the National Lottery draws coinciding with, amongst other factors, the increase in ticket price from £1 to £2 which was introduced in October 2013.” (Gambling Commission: ‘Gambling participation in 2016, behaviour, awareness and attitudes)

 

  1. In September 2017 Camelot stated: “the main reason for the fall in sales last year was the disappointing performance of the National Lottery’s core draw based games – especially Lotto, with player confidence in the game still fragile following the recent game changes”. (Financial Times 2.9.17).

 

  1. We also note that the NAO investigation report highlights that the return to good causes per pound spent on the National Lottery declined to 21.6p in 2016-17. As the most recent Gambling Commission statistics show, the return to good causes per pound spent on society lotteries increased further in 2016-17 and is now 43.6p.

 

  1. Whilst recognising that the PAC inquiry is specifically into the decline in National Lottery income, we draw MPs attention to The Lotteries Council’s long-standing request that the 2005 Gambling Act be updated to raise the current legal limits on fundraising by society lotteries. This would allow society lotteries to raise millions more for good causes at a time of growing charitable need.

 

  1. The decline of charity funding by the National Lottery makes the need to grow the income to good causes from society lotteries even more pressing.

 

  1. This request has been considered in great detail by both Parliament and Government and we now urge Government to publish proposals to raise the society lottery limits.

 

  1. We recommend that the Public Accounts Committee note the NAO findings on society lotteries.

 

  1. We also recommend that the Committee urge the Department for Digital, Culture, Media and Sport, to take urgent action to raise the society lottery limits in order to increase funding to good causes.