How Labour is protecting National Lottery monopoly – and costing good causes up to £132m
With charities desperate for money, why isn’t Labour choosing to help organisations like the People’s Postcode Lottery that generate large amounts of cash for good causes?
I wouldn’t describe myself as a mug punter; I may be a mug, but I’d have to gamble a bit more to be descried as a punter of any description. I don’t do the lottery, don’t put on bets to pep up football on the telly and, with occasional exceptions, only back the gee-gees when I’m at a meeting.
It’s hard to beat a day at the races when the weather is as glorious as it has been this summer, and not for nothing is horse racing Britain’s second-biggest spectator sport behind football, with just under five million racegoers a year. I was at York last month with a gang of old journalism college mates, one of whom has made something of a career as a tipster and knew one of the winning owners. Champagne? Don’t mind if I do.
The excitement of winning is hard to beat, but it’s also not difficult to appreciate the danger of chasing losses. And in a week when Labour government policies have put unemployment up to a four-year high and with inflation rising, we all need some cheering up but it’s also understandable if more people seek easy ways to escape a financial hole.
Problem gambling
Fears about problem gambling have grown, largely due to high-profile stories of professional footballers getting into deep trouble – young men with lots of money and nothing better to fill their days after training – and, at the opposite end of the scale, are fixed-odds machines in bookies’ shops in run-down estates, snaring people with no money to spare. Last year’s Gambling Survey for Great Britain, in which Glasgow University researchers questioned 10,000 adults, indicated the UK could have as many as 1.3 million problem gamblers.
With this in mind, the UK Government recently paused a plan to relax regulations for high street ‘adult gaming centres’, which currently limits the number of machines paying out £500 jackpots to a fifth of the total in the shop. Operators argue this so-called 80/20 rule limits growth because players tend not to use the 80 per cent of machines with pay-outs capped at £100.
Meanwhile, new legislation has been passed for England and Wales to tighten casino operations, slashing the number of machines from a Vegas-style maximum of 1,250 to just 80. It’s all a long way off from the super casinos the Tony Blair government hoped would give a boost to old seaside resorts like Blackpool.
This new conservative approach is also affecting lotteries, but for very different reasons. Far from wanting to protect the public from evil, the Labour government has decided to shield the National Lottery – operated by Allwyn, the international “lottery-led entertainment company” which won the franchise from Camelot last year – from stronger competition, despite its own evidence showing that millions more could be donated to good causes if lottery rules were changed.
People’s Postcode Lottery
At the heart of the argument is the Edinburgh-headquartered People’s Postcode Lottery (PPL), by some way the UK’s biggest operator after the National Lottery, and the only one affected by a current £50 million cap on annual ticket sales. PPL has been arguing for the limit to be raised to £100m, and a report commissioned from independent economics consultants for the Department of Media, Culture & Sport confirmed that PPL’s ticket sales would grow by between £51m and £477m, which would generate charitable donations of between £17m and £157m.
The downside, they say, is that the competition could reduce National Lottery sales (currently just over £8 billion) by between £25m and £148m and reduce its support for good causes from anything between £5m and £30m. As the report acknowledges, the simple arithmetic shows that lifting the ticket sales limit should result in a minimum boost for donations of £16m, and a potential to produce an extra £132m, a 6.5 per cent increase.
The official argument is that if the ticket limit was raised, it would allow the PPL to use higher sales to increase its prizes and so encourage more players to switch from the National Lottery. But the PPL points out that separate legislation fixes the maximum prize to £500,000. Of course there is a strong argument lifting for that too, given the twice-weekly Euromillions draw, run here by Allwyn, guarantees ten UK players will win £1m.
PPL also points out that the government has decided not to regulate big commercial prize draws like Omaze (million-pound houses for a minimum £10 entry) and Raffle House (a £10 ticket could win you a £3m Home Counties house and a £65,000 Porsche) as if they don’t have an impact on the National Lottery.
Government protectionism?
At a time when Third Sector organisations are desperate for money, it might have been expected that the opportunity would have been embraced with enthusiasm, but instead the government has decided to keep the ceiling as it is, primarily because of a fear that the Exchequer will lose up to £18m in lottery duty from Allwyn and “remove one of the policy levers available to government to protect the National Lottery and the funding it raises”.
Yet, the official report acknowledges that when the ticket sales limit was lifted from £10m to the current £50m in 2020, the same fear that the National Lottery would suffer turned out to be wide of the mark and, according to the Gambling Commission, National Lottery sales grew by £1.2bn between 2017 and 2022.
So, shouldn’t the Competitions and Markets Authority launch an investigation into what amounts to state-driven protectionism for a government-backed monopoly? You bet. But what are the odds on that…?
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