GC updates society lottery prize limits, transparency rules

29 April 2020

The British Gambling Commission has updated the regulations surrounding society lotteries, raising prize limits but also requiring a greater deal of transparency regarding spending of proceeds.

The changes follow a consultation by the Commission, that ran from 19 December 2019 to 12 March.

“This consultation has strengthened several important aspects of our licence conditions and codes of practice which apply to society lotteries,” Sarah Garnder, executive director at the Gambling Commission, said.

In line with changes to the 2005 Gambling Act, announced in July 2019, the maximum amount of money that may be won as a single prize will be raised from £400,000 to £500,000, while the maximum total winnings pool will be raised from £4m to £5m. The maximum combined winnings for a year will be increased from £10m to £50m.

The Commission said that some respondents to its consultation felt the change didn’t go far enough, while others felt the increased level of winnings could cannibalise National Lottery revenue.  It added that several respondents suggested a review of the lottery market to measure any impact if changes are implemented.

The new limits will be applied on a pro-rata basis for the remainder of the calendar year.

New requirements and guidance will be put in place to make it easier for consumers to understand how much revenue from these lotteries is returned to good causes and to which causes it is allocated.

Before the purchase of tickets, operators must make available the percentage or amount of the proceeds spent on prizes, costs to promote and run the lottery, and good causes, as well as the total proceeds from all tickets sold.

“Where the actual amounts for that type of lottery draw cannot be determined in advance, licensees should consider how best they can provide a reasonable estimate to consumers,” the Commission said. 

The regulator had previously suggested a more detailed breakdown of expenses before the consultation, but opted to reduce the level of detail required after operators said providing such detail would be unnecessarily costly and would require a level of scrutiny to which other types of operators are not held.

In addition, operators will be required to make available to consumers a description of the way in which winners are determined and prizes allocated, the potential prizes available and the likelihood of winning a prize before the purchase of a ticket.

Operators must also make available information on how the allocation of grants is determined, including examples of recipients.

The Commission said all of this information could be included in marketing communications, advertisements, promotions, the lottery website, ticket documentation or the terms and conditions of the lottery.

“It is critical that consumers have information available to them to help make fully informed decisions about whether to participate in lotteries,” Gardner said. “These changes will make sure that consumers haave ccess to that information, and the key areas which they and wider stakeholders told us were important to them.”

The Gaming Commission licenses over 490 lotteries, which raised £332m for good causes in the year ending 31 March, 2019.