Why isn’t the Health Lottery making millionaires?

Why isn’t the Health Lottery making millionaires?

Monday, February 12, 2018

The regulatory regime created by the Gambling Act 2005 effectively split the UK lottery market into two categories, which arguably can’t compete fairly and effectively. While it appears that both the National lottery and society lotteries provide the same game, each side is subject to a different set of regulations, creating a monopolistic advantage for the former. Thus, the current regulatory set up simply undermines fair competition, hinders further fundraising funds to good causes and impairs consumer experience.

With over 50% of adults in the UK playing lotto on a regular basis, the National Lottery retains its position as the undisputed market leader for over 20 years. However, recent stats are suggesting that the public is not particularly satisfied with that arrangement; public participation in the National Lottery has been steadily dropping since 2014, when Camelot increased its ticket prices to £2, and it is now at its lowest in years. Participation in society lotteries, on the other hand, has been steadily increasing, reaching a total revenue of 586M in 2016, the highest ever. The contribution to good causes by both sectors is following the same trend: While National Lottery’s charity contribution has fallen in by 15% from 2015 to 2016, contributions from society lotteries have increased by 22% in the same period. 

Maintaining an appropriate balance between different operators should be at the top of governmental priorities, especially if some of them seem to be more effective in raising money than others. In reality this is not the case. Society lotteries are held back by stringent limitations on the jackpots they can offer – £25,000 or 10% of draw sales, but not more than £400,000. This means that even if a society lottery would sell north of 4 million tickets for a given draw, they still wouldn’t be able to give out more than £400,000. Not to mention the marketing nightmare that comes with it; how are you supposed to advertise a lottery if you don’t know what the jackpot will be? And even if you found a way to do so, how effectively would you be able to compete on marketing costs with someone that advertises a £101M jackpot? 

The solution seems obvious: increase the prize limitations on society lotteries and allow them to compete on equal terms. It should come as no surprise that The National Lottery isn’t particularly fond of this idea, and indeed they’ve been working hard to block it. And yet something needs to change if society lotteries are to continue serving the purpose they were designed for: raising money for good causes that can’t get access to other types of funds. At the end of the day, the public will be the first to benefit from fairer competition. More support will go to more charities from even more areas and, not less importantly – many more millionaires will be born.

Yakir Firestane is Director of Gaming at Northern and Shell (Health Lottery). Connect with Yakir on LinkedIn here.