MPs call for changes to lottery regulations to help maximise returns for charities

Categories: Community Engagement.

The inquiry was announced last summer with the aim of examining the role of society lotteries (which raise money for charities and other good causes) and their place within a system which includes the Health Lottery and the National Lottery.

Following this inquiry, the committee has made a number of recommendations, including that there should be greater differentiation between the regulations applied to small, local lotteries and those applied to larger ones – especially those run by commercial organisations.

They also also called for legislation to be amended to recognise a class of ‘umbrella lotteries’, with its own set of limits on individual draws, annual sales and prizes.

To help new lotteries, MPs recommended that the requirement for at least 20% of the ticket receipts from each lottery to be given to good causes should be spread over an extended period, perhaps three years, to help lotteries to cope with high start-up costs. 

John Whittingdale, Chair of the Committee, commented: “Many charities now depend upon society lotteries as a vital source of funds. We want to see the maximum return to good causes and believe that the regulatory regime governing society lotteries should be designed to encourage that.

“Provided that the lottery remains focused on its primary purpose, the licensing regime should be light, including continued exemption from gambling and lottery taxes.

“We are concerned at the growth of large, so-called umbrella, lotteries which are designed to get around the statutory maximum amounts for sales and prizes. While we think increasing the minimum return of 20% across the board would be counterproductive, it is not appropriate that large, well-established lotteries should provide only the minimum return to good causes.

“We therefore recommend the creation of a new category and the reintroduction of a cap of 35% on operating costs for the large well–established lotteries. This will help ensure that these lotteries are genuinely maximising the amount of money they raise for the causes that they support.”

The committee report is available to download from the Parliament website.

A separate call for evidence on the regulation of lotteries by the Department for Culture, Media and Sport closed on 4 March and they are currently reviewing this evidence,

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