The Gambling Commission’s consultation on society lottery reform is due to close next month, on 12 March 2020. The consultation seeks views of both gambling industry stakeholders and consumers on what measures should be implemented to enable participants in lotteries to make better informed decisions about whether to gamble, as well as reflecting a pending change in law to the per draw and maximum prize limits of society lotteries.

Government Reform

In June 2018 the government published a consultation on society lottery reform, in particular looking at potential changes to lottery proceeds (ticket sales) and prize limits. Following the consultation, the government announced its intention to amend the Gambling Act 2005 and raise the limits on (i) lottery proceeds, from £4m to £5m (ii) the maximum individual prize, from £400,000 to £500,000 and (iii) the annual aggregate lottery proceeds, from £10m to £50m. Such changes will be brought into effect by way of the Gambling Act 2005 (Variation of Monetary Limits) Order 2020. As required by the Gambling Act, the Commission must attach conditions to all lottery licences it issues and therefore must update the existing conditions, as currently set out in the ‘Licence Conditions and Codes of Practice’ (the “LCCP”), to reflect the government’s intended changes.

Gambling Commission Consultation

Before the Commission can make changes to the LCCP they are required to consult with those affected. Until they do so, the changes in legislation will not be reflected in the LCCP, and therefore operators will not be able to benefit from the increased limits. The Commission is also using the consultation as an opportunity to address broader transparency concerns about society lotteries.

In its overview of the consultation, the Commission states: “we are 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.”

Specifically, the Commission proposes that a new social responsibility code provision 4.3.3 is added to the LCCP which requires society lottery licensees to ensure sufficient information is made available to consumers to make an informed choice prior to participating in a draw (including, as a minimum, details of how and where proceeds are used, as well as the likelihood of winning a prize and how prizes are allocated). The new condition also requires licensees to take into account the Commission’s guidance on information to lottery players, a draft of which is provided as part of the consultation. Such guidance sets out the specifics of what the Commission expects compliance with the new social responsibility code provision to involve.

Society lotteries exist primarily as a form of fundraising for good causes and to encourage consumer engagement with communities through sport or cultural activities. In theory the proposed changes to legislation will create increased funding for such causes. However, addressing transparency concerns are clearly crucial to the Commission’s wider objective of promoting fairer and safer gambling across the board. The Commission’s strategy for this consultation appears to be a considered approach – looking to enhance the ability of society lotteries to promote good while also making sure that the licencing framework is updated in a way to make consumer participation in society lotteries more transparent and safe.

Consultation Participation

In order to achieve its aims the Commission has stressed that they would like to hear from consumers of society lottery products, current and prospective society lottery licensees, charities and organisations concerned with gambling and social responsibility, other organisations with an interest in society lotteries, and academics. Those that would like to participate in the consultation can do so here. The Commission’s proposed wording for social responsibility code provision 4.3.3, and the accompanying guidance, can be found within the consultation response form.

Article co-authored by Rahul Gandhi.