It has been reported in various industry media articles that the Lotteries Council has expressed “increasing concern” about the use of prize draws operated by commercial gambling companies that market themselves in a similar way to charity lotteries.
Tony Vick, Chair of the Lotteries Council is reported as saying:
Lotteries face a series of legislative hurdles that restrict our ability to grow and raise funds for good causes while prize draws face no limits on how many tickets they can sell, what prizes they can offer, and choose whether and how much to give to any charity. We hope the government looks at this to ensure a fairer playing field.
This concern follows research conducted in October 2021 amongst 4,000 UK adults by strategic insight agency Opinium (for Jumbo Interactive Limited) that found:
- consumers used credit cards to spend £117million to enter prize draws and prize competitions within the previous year, a significant issue given that:
- if run in accordance with the requirements of the Gambling Act 2005, prize draws and prize competitions do not require a licence from the Gambling Commission (as explained on the Commission’s website here and, most recently, in our January 2019 website posting entitled “Raffling big ticket items such as houses and cars”, and
- the credit card ban for all forms of remote gambling that came into force in April 2020, as reported by us here,
- nearly 10% of people who entered prize draws and competitions offering such high-value prizes as mentioned above have ended up in debt, and
- 72% of people who enter lotteries, draws or competitions think prize competitions and draws should be regulated in the same way as gambling.
Arising from the above findings, and in line with a clear majority finding from the research, Jumbo Interactive is itself calling for introduction of regulation of the prize draw and prize competition market, its UK General Manager, Nigel Atkinson, stating:
A huge amount is being spent on credit cards on prize draws, pushing people into debt – despite the free entry option being the reason they are exempt from oversight. With so much money changing hands, the government needs to look at the proper regulation of prize draws and competitions to better protect consumers.
For many, the fact that some of the cost of entering prize draws and competitions goes to charity is a big part of why they enter. But it remains easy for companies to bury information in the terms and conditions about how much actually goes to charity.
Society lotteries on the other hand have minimum donation rates and help raise funds for a wide range of important causes, large and small. Public trust is crucial for society lotteries to operate successfully, and increased regulation of the prize draw and competition market will offer that consistency and transparency.