After years of lobbying and debate, the Department for Digital, Culture, Media and Sport finally issued its much-anticipated Consultation on society lotteries and their financial limits on 29 June, via Tracey Crouch MP, the Minister for Sport and Civil Society.
The sector has long been campaigning for an increase in the financial limits which apply to society lotteries, which currently stand at annual total proceeds (ticket monies) of £10m, proceeds per draw of £4m and a maximum top prize of £25,000 or, if more, no more thank 10% of the proceeds. This effectively means that, at present no-one can ever win more than £400,000 as a top prize in a society lottery.
Of course, this is all designed to protect the position of the National Lottery as being the only lottery product where one might hope to win a life-changing sum. However the society lottery sector has argued that the current financial limits hamper its ability legitimately to raise money for good causes and the Government is now re-evaluating the position, recognising that society lotteries are “a fundamental part of the giving landscape” and acknowledging the views of many charities who say that money from society lotteries and the National Lottery are “complementary sources of funding that enable us, in different ways, to carry out our vital work.”
The Gambling Commission’s (“GC”) advice to Government is that the recent growth of the society lottery sector has not been to the detriment of National Lottery sales. The pervading view currently seems to be that the two can peacefully co-exist and that, indeed, the society lottery market might even encourage participation in the National Lottery.
This Consultation, then, seeks to enable the society sector to grow in a sustainable manner and in a way that is complementary with the National Lottery. The Government’s “preferred options” are to:
- increase the per draw sales limit to £5m;
- increase the annual sales limit to £100m; and
- increase the per draw prize limit to £500,000.
Whilst the annual limit is perhaps what the sector was after, many will be disappointed with the proposed modest increases for individual draws. The prospect of an increase to a £10m individual draw limit remains on the table, though – but so does cutting it to £2.5m, or leaving it as it is. Government is also looking at leaving the annual proceeds limit in place, or raising it only to £50m rather than £100m.
All of this only applies to large society lotteries, licensed with the GC. For small society lotteries registered with Local Authorities, the Government has no preferred view; instead, the Consultation suggests leaving matters as they stand (ticket sales of £20,000 per draw and £250,000 per year) or raising them to £30,000 or £40,000 and £400,000 or £500,000, respectively.
There is no doubt in my mind that this constitutes a pivotal point for the society lotteries sector and that what emerges as a result of this Consultation will shape its future for many, many years to come.
It is therefore essential that all in the sector and anyone with an interest in using lotteries (or raffles, which are the same thing in law) have their say before this Consultation closes at noon on 7 September. A link enabling you to do so is here:
We will, of course, report on the outcome in a future edition of our Newsletter.