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DCMS review findings of 2020 Society Lottery reforms disappoint

DCMS’s report on its one-year review of society lotteries sales and prize limits is disappointing, say the Lotteries Council and the People’s Postcode Lottery.

Published yesterday, the DCMS review is on the impact of changes made to legislation and introduced in July 2020, and considers the areas of sales, prizes, expenses, good cause returns, and transparency.

The changes saw the annual sales limit increased from £10 million to £50 million, the per draw sales limit increased from £4 million to £5 million, and the maximum per draw prize limit increased from £400,000 to £500,000.

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On sales limits, DCMS says:

“At present, no individually licensed society lottery has sales close to the £50 million limit, and only one operator (managing 20 society lottery licenses on behalf of different Trusts) would currently benefit from further annual increases, so we do not see a case for further change at present.”

On prize limits, DCMS says:

“Since July 2020 only one draw has taken place offering a prize above the previous £400,000 limit. This suggests that societies are not constrained by the rule that prizes can be no more than the larger of £25,000 or 10% proceeds.”

On returns to good causes, it states:

“There is some evidence to suggest an increase in returns to good causes from umbrella branded lotteries, but a slight decrease in the percentage from non-umbrella lotteries going to good causes, which may be due to the impact of the pandemic. We have not seen any data to suggest any reason to currently consider a change to the current minimum return to good causes.”

DCMS concludes early indications are that the increased limits are ‘bedding in well’, and that no policy changes are needed at this time.

However, People’s Postcode Lottery and the Lotteries Council have both expressed their disappointment that the annual sales limit is to remain at £50 million, despite charity and political support – previously including DCMS – for a rise to £100 million.

People’s Postcode Lottery described the further delay as a “missed opportunity” to help local and national charities across Britain, with its Managing Director, Clara Govier, saying:

“This statement from DCMS is a missed opportunity for the Government to support the charity and charity lottery sectors at a time when charities have been impacted by two years of the Covid pandemic, which has affected charity fundraising at the same time as increasing charitable need.

“We were pleased to work with the Government on the initial increase to a £50 million annual sales limit and it is clear that these changes have had the intended effect of increasing funding to good causes. For the Government to not consider further changes which they previously supported is concerning and disappointing and a missed opportunity to support charities.

“Increasing charity lottery limits further would provide support to communities at home and abroad as we seek to address the challenges facing society, many of which have been exacerbated by the pandemic. We urge the Government to urgently review this position and for Ministers to engage with the sector in order to help it to thrive and to support good causes.”

The Lotteries Council has also expressed its disappointment at what it calls ‘the timid findings’ of the review as well as the lack of clarity around any future proposed action to support the continued growth of the society lottery sector, given DCMS previously supported a £100m annual sales limit for operators.

The Lotteries Council is also concerned that key issues raised directly by the society lottery sector during the consultation have been left unengaged, such as the impact of current draw limits on the ability to offer the maximum allowable prize of £500,000 in order to increase ticket sales and thus returns to good causes.

Commenting, Lotteries Council Chair, Tony Vick said:

“We are delighted that DCMS acknowledges that the main aims of the government’s society lottery are off to a flying start – with the biggest lotteries delivering more for good causes and sector expenses as a whole falling. Crucially, DCMS acknowledges that society’s lottery growth is having no discernible impact on the National Lottery.

“It is therefore perplexing that DCMS has cited Covid as the reason for opting not to make a firmer decision on the full success of the 2020 society lottery reforms, given the vital charitable fundraising our sector undertook during the pandemic.

“The Lotteries Council is disappointed that DCMS has reached its conclusion despite the responsible Minister unfortunately being unable to make time to meet with the sector, while partly basing their decision upon unpublished Gambling Commission data.

“The Lotteries Council calls upon the Government to clarify how they now intend to fulfill their commitment to see the society lottery sector continue to ‘thrive’ and maximize returns to good causes across the country.”

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