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


APPENDIX 10

Memorandum submitted by Rank Group plc

1.  THE PROMOTION AND PUBLIC IMAGE OF THE NATIONAL LOTTERY

  1.1  The National Lottery has been one of the UK's commercial success stories of the 1990's. From a standing start on 14th November 1994 some 30 million people play the National Lottery regularly representing some 68 per cent of the 16 and over UK population. [From Camelot statistics]

  1.2  The National Lottery enjoys unfettered national advertising through all forms of print and broadcast media. Continuous national marketing reinforces the product's image, highlighting the £millions to be won.

  1.3  The game is played live on a major public service broadcasting channel, attracting some 16 million viewers per week.

  1.4  There are 34,000 Lottery retail outlets reaching over 90 per cent of the population within two miles of home or work. The National Lottery offers a subscription service for players who cannot attend a retail outlet.

  1.5  The scale of the promotion of the National Lottery is unparalleled in the history of UK gambling and heralds a sea change in social attitudes and public policy towards gambling. Gambling is now seen more as a bone fide leisure pursuit, a part of everyday life, marking a significant change in social attitudes.

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

  2.1  Over the seven years of the current licence, conservative estimates expect the National Lottery to raise at least £10 billion for good causes, give away £15 billion in prizes and pay £5 billion in tax.

  2.2  In contrast, "Total ticket sales raised by Society Lotteries declined from £161 million in 1998-99 to £103.5 million in 1999-2000, a fall of around 35 per cent" [Report of the Gaming Board for Great Britain 1999-2000]

  2.3  The 1999-2000 Gaming Board Report records a particularly sharp decline in individual lotteries raising large amounts (ie over £200,000). The returns for lotteries promoted by Local Authorities show a significant decline from total ticket sales of £730,000 in 1994-95, to ticket sales of £82,100 in 1999-2000.

  2.4  Society Lotteries raised £48.5 million for good causes in 1999-2000 compared with £62 million in 1998-99, a 22 per cent reduction.

  2.5  Society and Local Authority Lotteries appear to be in significant decline. The sums they raise are of considerable importance to the charities that sponsor them, who cannot easily make up the loss of income from other sources. This cannot be a socially desirable or sustainable outcome.

  2.6  The future ability of Society and Local Authority Lotteries to raise charitable funds for good causes must be addressed urgently. The sums are not significant by the standards of the National Lottery, and could be restored to their former levels without damaging the National Lottery.

  2.7  Specifically, there is a need to provide relief to Society Lotteries by acting on their long-standing application for increases in respect of monetary limits on stakes and prizes and roll-overs. The evidence presented above provides compelling evidence of the need for early action.

3.  THE ROLE OF THE NATIONAL LOTTERY COMMISSION (NLC)

  3.1  The promotion of the National Lottery reflects the statutory duty on the National Lottery Commission (NLC) to maximise the income for the National Lottery Distribution Fund. The NLC allows the Lottery operator to advertise and promote the National Lottery with the widest latitude, and to introduce major new games with comparative ease.

  3.2  By contrast, other forms of gambling are tightly regulated through long-standing statutory controls and regulations. The underlying philosophy, which dates back to the 1960s, has been that nothing should be done to encourage participation (to "stimulate demand").

  3.3  The result has been that other gambling products are restricted in many respects as compared with the National Lottery. There are restrictions on such maters as the number of outlets, advertising, maximum prizes, maximum stakes and roll-overs. In addition, there are continuing restrictions on the games that can be played and the facilities that can be offered.

  3.4  In addition, the regulatory values and decisions applied by the NLC also appear to be different from those applied by other regulatory bodies, such as the Gaming Board. The Gaming Board operates very strict controls, whereas the NLC appears to operate with a lighter touch.

  3.5  For example, earlier independent research indicated that 6 per cent of Lottery purchases were made illegally by someone under 16 and that 9 per cent of purchases were made by an adult for a child. Gambling operators regulated by the Gaming Board would face severe sanctions if they permitted under-age gambling.

  3.6  The benign regulatory framework within which the National Lottery operates has created an uneven playing field for longstanding and highly regulated gambling operators. The problem cannot be redressed within the existing legislative framework, and a fundamental reappraisal is required, taking account of the legitimate needs of all forms of gambling.

4.  RECOMMENDATIONS

  4.1  In the short-tem, the Culture, Media and Sport Select Committee should support the long-standing Society Lotteries application for four interim measures:

    —  An immediate increase from £1 to £2 in the maximum price of a Society Lottery ticket.

    —  An immediate increase in the proceeds for a single Society Lottery from £1 million to £2 million.

    —  Allow the proceeds of individual Society Lotteries to be accumulated and donated to a successive lottery.

    —  Allow Society Lotteries flexibility in setting individual prizes within overall lottery limits.

  4.2  For the future, the Select Committee should support calls for a single gambling regulator, with the aim of providing a level playing field for all forms of gambling, within a benign regulatory framework consistent with declared policy objectives.

October 2000


 
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