Proposed changes to society lottery codes of practice

Proposed changes to society lottery codes of practice

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

The Gambling Commission wants lottery operators to be more open with customers as to what proportion of proceeds (ticket sales) go to good causes and which causes benefit. To this end, it has launched a consultation exercise on proposed changes to the Licence Conditions and Codes of Practice which apply to lottery operators.

At least 20% of lottery proceeds must go to good causes, but the Commission has made the point that this should be treated as a minimum rather than a target. As with other areas of gambling, the Commission wants to see standards being raised.

The proposed new and amended provisions, which would apply to lottery operators and external lottery managers (ELMs), are as follows:

• Lottery operators will, through their annual report, society website or any other appropriate medium, have to provide details of the percentage of the total proceeds returned to good causes;

• Lottery operators will have to ensure that each individual society lottery that forms part of a single-branded scheme is promoted separately, and make it clear to customers which society lottery they are entering;

• Where a number of society lotteries are promoted under one brand, whether through an ELM or not, operators must ensure that:

a. advertising for the umbrella lottery brand makes it clear that each draw will be on behalf of separate identified societies,
b. the relative prominence of the name of the umbrella lottery brand in advertising is secondary compared to the name of the society or societies, and
c. the lottery ticket (or e.g. confirmation email) clearly and prominently displays the name of the individual society or societies involved in promoting each draw.

The more onerous of these requirements is likely to be promoting individual lotteries within an umbrella brand separately, and making the name of the relevant good cause more prominent than that of the umbrella lottery brand. In many of the popular society lotteries (such as the Health Lottery, Weather Lottery or Postcode Lottery) the lottery brand is what customers know and plan to enter, rather than looking to enter a lottery to support a particular charity. Where customers are actually entering one of a number of lotteries when they enter a branded lottery, for example depending on where they live, making national advertising compliant with these new requirements will be challenging.

In relation to the percentage of proceeds that go to the society, the reality is that only those operators with a particularly high percentage are likely to choose the option of displaying this figure on their website. The option to provide this information only in the annual report may be more attractive, and only a small number of customers are then likely to discover that information. Despite the Commission’s intentions, this requirement may be unlikely to lead to higher proportions of lottery proceeds going to good causes.

The Commission also proposes to clarify what is a “low frequency lottery”, a “high frequency lottery” and an “instant win lottery”, which attract different requirements for prevention of underage gambling.

The closing date for responding to the consultation is 30 September 2017.