Memorandum submitted by GamCare
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 withoutexcept
for the football poolslong 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
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
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.
3.1 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
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
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.
5.1 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
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
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.
7.1 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
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
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
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
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
9. THE IMPACT
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
10. THE IMPACT
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
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
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
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
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.