Charity lotteries - big opportunities and minimal risks

We've released two reports looking at all things to do with charity lotteries. In this blog, we summarise some key findings from this research, undertaken on behalf of the Lotteries Council.
Joe Saxton
 
We’ve publishing a report Hitting the Jackpot, commissioned by the Lotteries Council, which looks at the evidence that charity lotteries (also called society lotteries) have an impact on the success or otherwise of the National Lottery. This joins another report, Responsible Play, also commissioned by the Lotteries Council, which looks at the extent to which charity lotteries are likely to be the cause of problem gambling or addictive behaviour.  In both these reports, we have bought together all the evidence we can find about these two issues and tried to present it all, and draw our conclusions. Together they are around 80 pages of evidence and analysis.
 
Charity lotteries matter because they have demonstrated a great deal of success over the last decade. Organisations from hospices to local charities, from animal charities to the People’s Postcode Lottery, have raised a growing amount of  money for good causes. So, anything which showed that those funds came at the price of a growing amount of problem gambling, or at the price of growth in the National Lottery would be bad news.
 
The good news is that the weight of evidence on both for  these two dangers shows the opposite. Let me cover each in turn.

Charity lotteries and gambling harms

 
The research indicates that there are a number of factors which contribute to gambling which causes harms. These are: 
  • The continuity of activity between the ‘gamble’ and the buzz of winning or losing. The longer the gap, the less likely the gamble is to cause problems. 
  • The ability to apply skills to the gambling, whether perceived or real. So, betting on sports, or ‘knowing’ that a particular colour or number is going to win increases the likelihood of gambling harm
  • The motivation for gambling is also important. So those who gamble to win money, or recover their losses, are more likely to be at risk, than those who gamble for fun or to raise money for good causes.
The data indicates that about 14% of people play a charity lottery on a regular basis, and this is pretty even between men and women (whereas most types of gambling are male-biased). This compares to the National Lottery at 41% and betting on races at 2% (a lot more data in table 1 on page 6 of Responsible Play). . And of course even these low figures don’t demonstrate that it is the lotteries which are resulting in problem gambling, but that some people who are already problem gambling will also play lotteries. Compare this to ‘machines in a bookmaker’ at around 14% or online slot, casino or bingo gambling at 9.2% (see table 2 in the report)
 
Our report Responsible Play made two recommendations. The first was that despite the low level of risks from charity lotteries and associated activities, the Lotteries Council should develop a code of best practice that all members should follow. This could cover activities such as staff training, developing systems to look out for problem activities (for example by capping how much people can play) and doing a risk mitigation for all activities. Any final code could stand alone or be incorporated into the work of the Fundraising Regulator.
 
The second recommendation was that the Lotteries Council should call for proportionate regulation in terms of the levy that those organisations who run charity lotteries should be asked to pay. In current debates around problem gambling the idea of statutory levy is often raised – and the figures of 1% of gross gambling yield has been mooted. However for all organisations from casinos to charity lottery operators to be asked to pay the same levy, given the low level of gambling harms caused by charity lotteries seems particularly unjust. Organisations which run gambling activities should pay a levy in proportion to the level of gambling harms they cause. One size fits all is simply unfair: those who cause the most harm should pay the highest levy and vice versa.

Charity lotteries and the National Lottery

 
Over the past decade and more, there have been a number of claims that the success of charity lotteries comes at the price of income for the National Lottery. While most of these claims originate from Camelot (the group who run the National Lottery and who have done so since its inception in 1994), it is a serious issue that we investigate fully in the report. The success of charity lotteries in recent years is hard to dispute: from contributing £95 million to good causes in 2008 they have grown steadily since then, and contributed £367 million to good causes in the most recent statistics. 
 
The evidence that this growth comes at the price of the National Lottery is weak. While charity lotteries have grown steadily, the National Lottery income and contribution is much more volatile (for example falling by £700m between 2015 and 2016) while charity lotteries had no change in the trajectory of their growth in the same period. Additionally, the National Lottery grew from £5149 million in 2008 to £7904 million in the most recent figures (all this is in charts 1 and 2 in our report). So, if charity lotteries are stunting the growth of the National Lottery it is neither clear how this is happening, nor is it clear how it is manifested in the income for good causes.
 
Indeed, if anything, our data shows the opposite of charity lotteries cannibalising the National Lottery: the total income for good causes has increased strongly from both types of lottery since 2008. Back then, the total income for good causes was under £1500 million and now its over £2000 million – yes that’s right lotteries are raising over £2 billion a year for good causes. We should all be pleased about that.
 
Overall, our conclusion is that charity lotteries and the National Lottery are complementary, and not in competition. They reach different demographics, through different marketing channels, with different motivations to play in a gambling market that is growing overall. The volatility of the National Lottery is more likely down to changes in internal factors such as the increase of the ticket price from £1 to £2, or external factors such as the growth of online gambling.
 
We are pleased that DCMS who have overall responsibility for charity and National Lottery regulation believe that both types of lottery can happily co-exist and thrive. That is the policy they are pursuing, and the evidence set out in our report back up this approach. Indeed, we called our report ‘Hitting the Jackpot’ because we believe that is exactly is what society is getting from the current approach – more money than ever before being raised by people playing games of chance to help good causes.

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