Consultation on society lottery reform

Overview

In June 2018 the Government published a consultation on society lottery reform, seeking views on potential changes to sales and prize limits for large and small society lotteries.

In July 2019, the Government announced that it intends to amend section 99 (3) of the Gambling Act 2005 to raise the per draw limit on lottery proceeds (ticket sales) from £4 million to £5 million, with the result that the maximum individual prize will raise from £400,000 to £500,000. 

In addition, the annual aggregate proceeds limit will rise from £10 million to £50 million. The Gambling Commission is required by section 99 of the Act to attach conditions to lottery operating licences for the purposes of achieving the requirements of section 99.

So the current limits, which are reflected in licence conditions attached to all society lottery operating licences, will also need to be amended to reflect the changes.

The reasons for changes to, and levels at which the limits will be set are explained in the Department for Digital, Culture Media & Sport’s responses document ‘Government response to the consultation on society lottery reform' (PDF) (opens in new tab).

We are also looking at the current regulatory requirements to ensure that issues related to the fair and open licensing objective, regarding transparency to consumers, are addressed.

We are seeking views on strengthening some aspects of the licence conditions and codes of practice (LCCP) and producing guidance related to information available to consumers.

This consultation will be of interest to consumers of lottery products, licensees and prospective licensees, charities and organisations concerned with gambling and social responsibility; and academics and organisations with an interest in lotteries.

Why your views matter

The Commission is consulting on measures to achieve the following outcomes:

• To amend the limits within the LCCP to reflect changes the Government plans to implement through secondary legislation.
• Enable lottery consumers to make better informed decisions about whether to gamble

Amending the limits

Section 99 of the Gambling Act 2005 (the Act) requires the Commission to attach various conditions to lottery operating licences issued to non-commercial societies or local authorities.

These conditions include the monetary or percentage limits on proceeds (ticket sales) and prizes in lotteries run by such societies or by local authorities. Section 99(11) of the Act permits the Secretary of State to vary by Order a monetary amount or percentage set out in section 99. 

Section 99(10) of the Act permits the Commission to set similar, or alternatively more onerous, conditions on a lottery operating licence.

This means that the Order (if implemented) will make changes to the limits in legislation. However, until those changes are reflected in the licence conditions attached to society lottery operating licences, operators will not be able to benefit from them. To make changes to the LCCP, the Commission is required to consult those affected.

Information for consumers

Over the course of the broader review of society lottery regulations concerns about the transparency of society lotteries were raised. 

In particular concerns were expressed about the lack of transparency in relation to odds of winning a prize, how much of the money raised through ticket sales goes to good causes and which good causes are supported.

The lotteries sector is, first and foremost, a form of fundraising for good causes to enhance and enrich aspects of British public life. We want to build on this success, while ensuring that lotteries are run in a way which is fair and safe for consumers.

Whilst we have previously taken measures to increase the information made available to consumers, we consider more could be done.

Specifically, we want consumers to be empowered to make informed choices about gambling and for the wider public to have a well-informed view of how gambling (including lotteries) can contribute to society. This is consistent with our Strategy which includes the priority of protecting the interests of consumers.

 We want licensees to make information accessible and more meaningful for consumers to help them understand their gambling choices at an individual level.

Our strategy set out that we want to see licensees across the gambling industry make a step change in the way consumers are equipped to understand and manage their gambling and to do that we will regulate to enhance minimum requirements.

We committed to promoting greater transparency by putting independent and trusted information into the public domain. Consumer choice is heavily influenced by price and it can be difficult for consumers to work out what else matters.

For lotteries this includes considering how to improve the transparency of the contributions they make. This is important information for consumers to help them understand which good causes are being supported and how much of their money goes to the good cause or elsewhere.

Therefore, this consultation makes proposals to strengthen the LCCP to ensure that lotteries continue to be run in a fair and open manner, including that consumers have all the information they require to make informed decisions before deciding to gamble.