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Government launches consultation on society lottery reform

Followings calls from within the sector, the Government has launched a consultation on increasing the amounts society lotteries can raise for good causes.

Followings calls from within the sector, the Government has launched a consultation on increasing the amounts society lotteries can raise for good causes.

Society lotteries are lotteries organised by charities or other non-profit organisations such as sports clubs, to allow them to raise money for good causes.

The Gambling Act 2005 distinguishes between "large society lotteries" and "small society lotteries" in relation to a number of factors including the proceeds generated by the lottery. Small society lotteries must not exceed £20,000 for a single draw or be promoted by a society whose aggregate proceeds from lotteries exceed £250,000 in any year. As such, they do not require a licence from the Gambling Commission and they benefit from a lighter touch regulatory regime than large society lotteries.

Conversely, large society lotteries require a licence from the Gambling Commission and can exceed the limits imposed on small society lotteries. However, they are subject to sales limits. These caps have not been increased since 2009 and society lotteries have been campaigning in recent years for increases, so that they can raise even greater amounts of money and capitalise on the popularity of such schemes. The current limits are as follows, with the government's preferred increases set out in brackets:

  • Individual per draw sales limits: £4 million (£5 million).
  • Individual per draw prize limits: £400,000 (£500,000).
  • Annual sales limits: £10 million (£100 million).

A major concern for the government has been to ensure that there is no risk to the National Lottery's ability to raise funds for good causes (due to increased competition). However, the Gambling Commission who is in consultation with the government is currently of the opinion that there is no evidence that society lotteries have had a detrimental effect on the National Lottery, with the two currently providing distinctly different offerings. The National Lottery with its larger sums can offer life-changing amounts of money whilst the society lotteries can offer smaller (but by no means insignificant) prizes, with the proceeds of the lottery generally going to an identifiable cause. The government is keen to maintain the effectiveness of the National Lottery, but as seen by the proposed increases set out above, clearly also acknowledges the benefits of the smaller schemes.

As part of the consultation the government also intends to consider whether the caps for small society lotteries, under which a licence from the Gambling Commission is not required (but must be registered with their local authority), should also be raised, though the government currently has no preferred position. The consultation will consider whether the individual per draw sales limits should remain at £20,000 or be raised to £30,000 or £40,000. It will also consider whether the annual sales limit should remain at £250,000 or be raised to £400,000 or £500,000. The government notes that there has not been such a strong call from the sector for changes to these caps, but increases would help towards the government's objective of minimising the administrative and regulatory burden. It will also allow small society lotteries to maximise returns without having to become licenced as large society lotteries.

The government welcomes comments from all stakeholders who may be interested and the consultation will close on 7 September 2018.

For more information on this topic, please contact Sonal Patel Oliva or your usual contact within Fieldfisher's Brand Development Team.

Co-authored by Alex Harbin.

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