Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


APPENDIX 6

Memorandum submitted by GamCare

1.  SUMMARY

  1.1  The National Lottery has been a great success in achieving its object of raising money for "good causes" and it has captured a large market share without—except for the football pools—long term damage to the rest of the industry. The National Lottery operator has an equal responsibility with the rest of the gambling industry to conduct its business in a socially responsible fashion. The requirement to include harm prevention safeguards for children and the vulnerable needs to be strengthened and their enforcement to become a responsibility of the regulating authority. Whilst a wide range of charities have benefited from Lottery grants, long term sustainable funding is a crucial requirement for the effective development of charities. The development of the National Lottery should not include either decreasing or increasing the number of "good causes" categories. The benefit and desirability of increasing the amount raised for good causes must not outweigh the need to discourage excessive gambling.

2.  INTRODUCTION

  2.1  GamCare considers itself to be qualified to respond to the issues both in its capacity as the national centre for information, advice and practical help with regard to the social impact of gambling and as a recipient of a National Lottery Charities Board grant.

  2.2  As reported in "Gambling Behaviour in Britain: Results from the British Gambling Prevalence Study" the National Lottery has clearly been successful in terms of the amount raised for good causes, in becoming firmly established within the UK and in being the most popular form of gambling amongst the adult population. It could be said that the introduction of the National Lottery has been a catalyst for change in that it has contributed to diminishing the stigma formerly associated with gambling and helped reposition gambling as a main stream leisure activity.

  2.3  Part of the reason for that is because it has not been perceived by everyone as gambling. Whilst the National Lottery draw can be described as a "softer" form of gambling and neither the draw nor scratchcards are a major cause of problem gambling, lottery products are by definition a form of gambling. The act of buying a lottery product involves taking a chance on an event where the outcome is not known, and where the stake is transferred from the losers to the winners.

  2.4  Its popularity, easy accessibility, and prominent media profile has ensured the UK National Lottery has become a flagship for the gambling industry as a whole. It is generally seen as a safe and acceptable form of gambling. The Gambling Behaviour in Britain report (p 61) indicates that National Lottery products have the lowest prevalence of problems among gambling activities. Depending on which screening device is used to measure "past year gamblers" this comes out as between 0.7 per cent and 1.2 per cent for the draw and 1.5 per cent and 1.7 per cent for scratchcards as against 5.6 per cent and 8.7 per cent for casino table games, and 5.8 per cent and 8.1 per cent for events with a bookmaker other than horseracing and greyhound racing. It is nonetheless clear that the Lottery creates problems for a small but significant number of players and contributes to the overall prevalence of problem gambling. Therefore, in GamCare's view the National Lottery operator carries the same degree of responsibility to minimise harm as the rest of the gambling industry.

3.  SELECTION OF A NEW OPERATOR AND ITS IMPLICATIONS

  3.1  GamCare acknowledges that as recent events have shown, selecting and effectively regulating the National Lottery operator is a difficult task. Despite the current situation we are of the opinion that the regulatory system has been strengthened by having more than one commissioner as the ultimate decision maker.

  3.2  We also agree with the view that probity is absolutely essential and that the process of selection and regulation needs to be fair and to be seen as fair. From our observation there appears to be a difference between the public perception of the business credentials of the current operator and its probable successor and the reality of the situation. This has the potential to damage the image of the Lottery and, despite the difficulties in accurately reporting anything of such complexity through the media, it is right that the Commission endeavours to do so.

  3.3  It is also right to include in the selection process and subsequent regulation the need to operate the Lottery in a socially responsible fashion. The operator must be able to demonstrate this in terms of the prevention of both illegal purchases and excessive gambling.

  3.4  An ethical and socially responsible approach must be a core consideration in both the policy and practice of the company that is granted a licence to run the National Lottery. This would include training programmes for the operator's staff and for retailers. The latter is especially the case when gambling is not the core business of a retailer because the understanding of its importance and incentive to give social responsibility issues priority is likely to be low. As has been demonstrated by the current licence holder, policy should also include support for social impact initiatives and consultation with the lead body regarding the design of new games and products.

4.  METHODS OF SALE OF LOTTERY TICKETS

  4.1  Draw tickets and scratchcards are currently sold from a larger number of non-gambling venues than any other form of gambling with the possible exception of the football pools. This alone makes it imperative that retail staff are trained in all aspects of the procedures and policies and clearly understand their responsibility when selling gambling products. As, by definition, scratchcards are a harder form of gambling and have a higher problem gambling prevalence rate than draw tickets GamCare would advocate that greater care needs to be exercised in their sale.

  4.2  The sale of lottery tickets should never become the overriding factor in the process of running the Lottery. A balance needs to be maintained between maximising opportunity and minimising harm. Therefore, customers should not be encouraged to re-commit winnings or to chase losses; advertisements should not be directed at children and should comply with gambling specific codes of conduct; information regarding the need to keep gambling under control should be prominently displayed at point of sale, and the telephone number of an appropriate agency that can help with problem gambling should also be displayed by the retailer and appear on play-slips and tickets.

5.  STRUCTURE OF LOTTERY PRIZES

  5.1  There is no doubt that the size of the jackpot is an encouragement to sales, and without the lure of a life-changing win the National Lottery would lose its pre-eminent position in the market place. Notwithstanding this fact, a change in the structure to allow a greater number of prizes to be won would probably increase sales. This change would be acceptable to GamCare as long as it does not induce "chasing". That occurs when numbers for the same game are drawn more frequently than once or twice a week, thereby putting players under pressure to cover every draw in case their numbers come up. Any change in the structure of Lottery prizes must not increase the likelihood of players becoming problem gamblers.

6.  ROLE OF NATIONAL LOTTERY COMMISSION

  6.1  It is essential to have a strong and effective regulator with real powers of enforcement for any gambling product. The National Lottery Commission has demonstrated that it can fulfil this role. However, in GamCare's recent submission to the Gambling Review Body we have said that a single regulator covering all gambling activities has the best chance of providing a cost effective and efficient service. If, on the other hand it is thought necessary to keep the Lottery separate from other gambling activities, we would like to see the NLC increase its function of inspection and enforcement. This should include a power to inspect and enforce the operator's policy and practices with regard to social responsibility. A further important aspect of the NLC's role that should continue is that of commissioning research.

  6.2  Above all the NLC should continue to maintain that difficult balance between ensuring as much money as possible is raised for the nominated good causes whilst ensuring that the Lottery is run with due propriety and that player's interests are protected. The last of these must include the third principle on which gambling is allowed in the UK, namely that there should be protection for children and the vulnerable.

7.  ENFORCEMENT OF AGE LIMIT FOR PURCHASE OF LOTTERY PRODUCTS

  7.1  This has been an issue since the introduction of the National Lottery and according to the NLC's own commissioned research there remains an unacceptably high number of underage purchases. It is vital that this requirement is enforced both to protect the integrity of the Lottery and to minimise the harm to children.

  7.2  Gambling, including the Lottery, is attractive to children for a number of reasons. The National Lottery Commission's own surveys bear out this view and that young teenagers have learnt the power of money but not the responsibility that goes with it. They will say that they see gambling as "easy money". Unfortunately, research also tells us that problem gamblers usually develop the habit at the age of 12-15. Like alcohol, gambling is not essential to the well being of an individual and, again like alcohol needs to be treated with respect. It is for these reasons that GamCare takes the view that, without exception, the age for playing any form of gambling, including the Lottery, should be raised to 18 in order to minimise harm to vulnerable children.

  7.3  Retailers must carry a large share of the responsibility to ensure that underage purchases are neither made nor encouraged. Now that there are proof of age schemes available such as Citizen Card and Validate retailers also have the authority to challenge any potential purchaser about whom they are uncertain.

  7.4  GamCare believes more can be done to encourage retailers on this issue. A greater training emphasis; reducing the "three strikes and out" principle to two; and more Training Standards operations involving children are likely to be effective. Retailers with Lottery terminals should be required to advertise and operate a proof of age scheme. Parents and other adults also need to be educated as to why they should not be encouraging their children to purchase Lottery products or, for that matter, buying tickets on their behalf.

8.  THE PROMOTION AND PUBLIC IMAGE OF THE NATIONAL LOTTERY

  8.1  GamCare recognises that the public image of the National Lottery is very important both in terms of players having confidence in its integrity and its bearing on the amount raised for good causes. Its promotion and its portrayal through the eyes of the media are therefore crucial factors as to how it is perceived. There is, of course, no guarantee that the media will report matters fairly or accurately, but a careful and balanced promotion of the Lottery should help ensure it has a positive image.

  8.2  There is a need to strengthen safeguards with regard to the promotion of the Lottery. Advertisements for the Lottery should not, of course, appeal to children particularly when promoted on television; a cautionary note should be included with regard to the need to keep gambling under control; especially on the televised draw programmes; the public need to be educated that it is not the operator who decides who gets the money for good causes. Additionally the leading organisations involved in the social impact of gambling should be consulted about promotional material and all socially responsible messages included in promotions should equally apply to new technology applications and means of communication.

9.  THE IMPACT OF THE NATIONAL LOTTERY UPON CHARITIES AND CHARITABLE GIVING

  9.1  There is clear evidence that many charities have gained from the distribution of money for good causes. Initially, however, it is our understanding that other charitable funding decreased and the net effect was a decrease in giving to charity.

  Whilst "good causes" grants can be substantial and can make a significant impact on the development of a charity it raises the question of sustainability. Some of the money requested is for short-term projects but it is erroneous to suppose that this is the main requirement for the charity sector. It is core funding and long-term income streams that are most vital to a charity being able to sustain its work. The voluntary sector is painfully familiar with boom and bust, particularly as it becomes more and more difficult to attract sources of funding without compromising the integrity of the organisation.

  9.2  For those charitable organisations that are eligible and that make a successful bid, the prospect of an assurance of long-term funding beyond a three year commitment would be of tremendous help. This is particularly the case with those organisations that address "unpopular" causes or who find they fall outside the criteria of the major charitable trusts.

10.  THE IMPACT OF THE NATIONAL LOTTERY UPON THE BETTING AND GAMING INDUSTRY

  10.1  There is little doubt that some sectors of the betting and gaming market were adversely affected following the launch of the Lottery. Whilst the betting industry appears to have recovered, the pools (as predicted) have not. On the other hand the whole industry has gained from the popularisation and legitimisation of gambling that has taken place since 1994.

  10.2  A challenge from lotteries was inevitable in any event so it is better from a financial, regulatory and socially responsible standpoint that this has come from our own Lottery. From GamCare's perspective the impact has been beneficial especially as the current licence holder has in many regards been at the forefront of developing a socially responsible approach that has encouraged other sections of the industry to follow suit. Within the range of legal gambling activities in the UK the Lottery provides a relatively safe form of gambling and adds to the choice available.

  10.3  Interestingly, it also provides a remedy for people who have got into trouble with hard gaming as it is safer for those who still need to gamble to participate in a softer form of gambling such as the National Lottery draw.

11.  THE TAXATION OF THE NATIONAL LOTTERY

  11.1  It is, in our view, right and proper that all gambling should be subject to taxation. Through the direct and indirect taxes that are payable the Lottery provides a valuable form of national revenue. The level of 12 per cent is probably about right (but see below).

12.  THE OPERATION OF THE NATIONAL LOTTERY DISTRIBUTION FUND

  12.1  Whilst it appears to work well there seems to be a significant lack of public knowledge about the fact that the Lottery operator pays around 28 per cent of its revenue to this fund and thereafter has no influence on how the money is distributed. The general public needs to be made aware that this is the case and that it is the six (about to become five) distribution boards who are entirely responsible for deciding on how the money is spent.

  12.2  It is appropriate that a percentage of ticket sales revenue and unclaimed prizes go to the NLDF. An alternative suggestion that GamCare makes in all seriousness is that the unclaimed prizes contribute to the financial support required by those national organisations that address the social impact of gambling and, in particular, provide education, training, treatment and research programmes.

13.  LEVEL AND DISTRIBUTION OF FUNDS FOR GOOD CAUSES

  13.1  The first point to make is that the voluntary sector provides the cement that holds together the bricks of society. Their share of the revenue generated by the National Lottery must never be eroded. If possible the percentage that goes to the NLDF should be increased. This could be achieved by reducing the amount paid in taxation or by capping the jackpot, rather than increasing the range and frequency of draws that could lead to an increase in problem gambling.

  13.2  Should the time come when less is needed for any particular distributing body the others should be given a larger share. We do not see that there is a strong case to increase or decrease the number of "good causes" categories. Also, despite publicity the public still find it difficult to grasp that only 28 per cent of their pound goes to good causes. There is a need to constantly remind people of this fact and to encourage them to continue to give directly to charity.

  13.3  Despite the temptation to do so, governments should not in any circumstances interfere in the decisions of the distributing bodies. Some grants will always upset certain sections of the public but it should not be forgotten that the needs of society are very diverse and it is supposed to be a Lottery for the people.

  13.4  Also, there is increasing scepticism that some of the "good causes" money is in fact funding projects that should be underwritten by government. This is particularly the case with the New Opportunities Fund and, if this idea gains credence it is likely to damage the integrity of the Lottery and the reputation of government. This in turn is likely to have a negative effect on sales.

September 2000


 
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