Memorandum submitted by Rank Group plc
1. THE PROMOTION
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
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
2. THE IMPACT
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
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
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
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
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
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.
4.1 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
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