Society lotteries: Giving or gambling?

The great society lotteries debate: giving or gambling?

For many charities, society lotteries are now an important part of the fundraising landscape, with many keen to see them grow. They’re part of a broader funding environment that includes the national lottery; viewed through a different lens, they’re part of a different landscape, that of gambling.

As such, they’re the subject of debate, with opposing views. At the risk of grossly over-simplifying the issues, opinions seems to be shaped by whether you think society lotteries are a form of gambling – and therefore a public bad – or are they a way of fundraising, and therefore giving – and as such a public good? This, and other issues, have been brought into sharp relief as Parliament’s Culture, Media and Sport Select Committee has been asking for views, as has the government department responsible for this policy area (DCMS). Parliament has today reported the findings of it’s inquiry, so now is a good time to highlight NCVO’s thinking.

In the spirit of transparency, it is important for me to state that NCVO has recently begun to operate a society lottery on behalf of its members.

NCVO’s view: society lotteries are a good thing

We’ve argued to both the select committee and to DCMS that society lotteries are a good thing: we’ve seen and heard evidence from members that the unrestricted funding they offer is particularly valuable; and we’re well aware that for some charities, the act of playing in a society lottery is the first step in a supporter relationship journey that can lead to players becoming donors. With money everywhere tight, we want to see such opportunities grow so that good causes get more support.

NCVO believes the cash limits on society lotteries should be increased

For society lotteries to raise more money, organisations such as the Institute of Fundraising and the Lotteries Council have argued that the limits that currently reply on turnover, individual games and prizes should be substantially increased. These limits have not increased for a number of years. We agree that the limits should be increased; and ideally, these would be regularly reviewed in the future.

However, we have been more conservative than others about how much the cap should be raised in our submissions. Some NCVO members strongly believe that lotteries are a form of gambling and that larger prizes in particular could encourage problem gambling. This isn’t our area of expertise, but we are conscious that public trust in charities could be damaged were a problem to arise: so, we’ve argued that a very substantial increase in turnover and prize limits needs better evidence that it wont damage public trust in the charity brand.

NCVO supports deregulation of society lotteries

We’ve also heard that some of the rules and regulations around setting up and running a society lottery are complicated and burdensome, particularly (but not exclusively) for small charities. For small charities, it’s almost impossible to set up a society lottery without an ‘External Lottery Manager‘, commercial organisations that specialise in running lotteries and licensed by The Gambling Commission. We’ve been clear in our submissions that it should be easier for charities to set up and run society lotteries.

Players should know how much goes to good causes

Much of our policy work at NCVO at the moment is about bigger issues facing the sector: public trust in charity; the mood for greater transparency and accountability; the role and right balance of regulation, and; the long-term sustainability of the voluntary sector. These all cut across the debate on society lotteries.

We’ve argued that if society lotteries are perceived as fundraising, then its important that the public should know how much is going to the good cause. Ideally this would be on the face of the ticket: we know this isn’t that simple, but believe a solution can be worked out. We also think the regulator or the umbrella bodies should publish comparable data on this, as is happening in other policy areas.

Above a minimum level of 20% of the ticket price going to good causes, we haven’t argued for what proportion should go to the good cause. We think players are best placed to decide that: and we hope that with greater transparency on how much goes to the good cause we might drive upwards the proportions and, ultimately, amounts going to good causes.

The lottery marketplace

One aspect of the debate we have not engaged in is the debate about the lottery marketplace: in other words, how the National Lottery co-exists with society lotteries and so-called ‘umbrella schemes‘ such as the People’s Postcode Lottery and the Health Lottery (and the People’s Health Trust, the recipient of the Health Lottery good causes). DCMS appears particularly interested in this issue. Again, it is important to disclose NCVO operates such scheme for its members.

Our responses have focussed on how to maximise returns to good causes; and while respective market shares and the rules around competition will inevitably shape this debate, we don’t have sufficient expertise on this issue.

The future

Society lotteries are currently a great success story: the latest figures from the Gambling Commission show a 14% increase on the amount society lotteries raised for good causes last year. They have an important role to play in the future sustainability of many charities and therefore we are supportive of moves to lighten the regulatory burden and encourage their expansion.

Lotteries are also a form of gambling, and not everyone in the sector is supportive of unfettered gambling: indeed, many are worried about what they perceive to be increasing visibility of gambling opportunities in our society. Therefore, we have taken the view that deregulation should be measured and ideally evidenced.

One person’s red tape is another person’s safety net. We hope our submission reflects this and we believe that the publication of the select committee’s report offers some ways ahead on these issues.

You can read our submission to the CMS select committee here: NCVO CMS submission.

You can read our submission to the DCMS call for evidence here.

Image: 1814 English State Lottery Ticket, by I took a photograph of this lottery document I own