Memorandum submitted by Bingonet Limited
Bingonet is a registered UK company that operates
the Bananalotto game in the UK. This game is currently being launched
throughout Europe. Bingonet was incorporated in May 2000 and the
Bananalotto site went live on 19 June 2000.
Our ambition is to become one of the biggest
online games sites in the world. We are committed to long-term
development and adhere to the letter and spirit of all current
laws regarding both games and privacy. We believe
that the best guarantee for longevity is an ethical approach.
Bingonet welcomes the opportunity to respond
to the Committee's inquiry and believe our experience as a recent
start-up whose viability is underpinned by new technology gives
us a valuable perspective both on the National Lottery's operation
and how it impacts on other numbers-based games.
Bananalotto is an Internet-based numbers game.
The website address is www.bananalotto.co.uk and we would urge
Committee members to visit this site to experience the game first
Key elements of the game include:
Participation is completely free,
with the prize money paid through sponsorship.
Players are invited to select seven
numbers including a "banana" number.
There are three scales of prizes:
six correct numbers + the "banana"
number: 1 million pounds.
six correct numbers: £100,000.
five correct numbers: £50.
four correct numbers: £5.
three correct numbers: 50 pence.
Draws are made every day and individuals
can enter up to three times for each draw.
Personal data is protected to standards
that exceed current data protection legislation.
Prize money is guaranteed through
Because no payment is required for entry, Bananalotto
does not constitute an illegal lottery under Section one of the
Lotteries and Amusements Act 1976. Neither is there any other
form of mandatory "contribution" towards entry in terms
of information, as the straightforward request for permission
to pass players' personal details on to third parties is entirely
Not only is this permission sought at the point
of participation, but also can easily be withdrawn at any later
stage if the player so wishes.
Essentially this structure means that Bananalotto
is neither gambling nor gaming
because there is no stake or financial risk to participants. Rather,
it has a similar status to that held by promotional draws popularly
used by chocolate, crisps and soft drink manufacturers. Other
similarly structured off-line games include the widely publicised
Readers Digest draw.
Bananalotto is therefore without many of the
risks that are commonly associated with gaming, gambling or even
the National Lottery. While we hope players will return to our
site and play regularly, there is no risk that they will become
financially indebted as a result. Nevertheless, in order to avoid
age-related controversy Bingonet has taken the decision not to
allow under-18s to participate and we also limit participation
to three games per player per day.
Bananalotto should therefore be viewed as a
game for people wishing to entertain themselves on the Internet,
rather than as gaming or gambling.
It is clear from the published list of likely
issues to be examined that the Committee intends to conduct a
wide ranging inquiry, much of which is neither directly relevant
nor within Bingonet's experience. Our evidence therefore covers
a smaller range of issues:
methods of sale of Lottery tickets;
the enforcement of the age limit
for purchase of Lottery tickets; and
the impact of the National Lottery
upon the betting and gaming industry.
1. Methods of sale of Lottery tickets
To date Lottery tickets are not sold over the
Internet. However, we understand that the possibility of Internet-based
National Lottery games is already under consideration. As a wholly
Internet-based business, we have a clear interest in any such
Bananalotto could not have existed as a viable
business without the Internet. The game provides a direct link
to sponsors' web sites as part of the entry process to each draw,
thus creating a clearly quantifiable commodity for sponsors that
is entirely cost free for participants. In short, Bananalotto
is an example of a genuine new business model enabled by new technology.
More broadly, anyone with access to the Internet,
be it at home, work or through Internet cafes or mobile telephones
can participate in online games. This can range from free games
such as Bananalotto through to hard casino-based gaming.
Moreover, because of the increasing portability
of machines that offer Internet access this can take place in
the home or pub, regardless of legislative restrictions of gaming
in licensed venues. We believe that the best way to respond to
these developments would be through clear, practical regulation
that is easily understood by players and operators alike and that
promotes trust in UK hosted sites by ensuring high operational
If the National Lottery is to have an Internet
presence in the future, we believe that the Lottery should be
subject to the same regime of safeguards as the rest of the Internet-based
game providers in the UK, proportionate to whatever degree of
"soft" or "hard" gaming is involved. The inclusion
of the National Lottery under any such regulation would enhance
the reputation of the Lottery and raise the profile of those safeguards
that protect UK consumers from unregulated disreputable operators.
In turn, the UK economy would through increased business opportunities
and through enhanced tax revenues.
2. The enforcement of the age limit for purchase
of Lottery tickets
As stated above, Bingonet believes that there
are risks associated with any game that involves a financial stake,
particularly where the ratio of stake to return lengthens and
as the opportunity to chase losses increases with frequency of
These risks can be reduced simply by reducing
the stakeultimately to zero, as with Bananalottoand
by limiting the frequency of draws. In order to avoid players
becoming addicted to the game, Bingonet has just one draw per
day with participants only allowed three entries per draw.
We also recognise that young players are more
likely to misunderstand the financial, social and psychological
implications of gambling. To minimise these concerns we have erred
on the side of caution by adopting a minimum age to play of 18.
Should a lower single minimum age be introduced more widely, commercial
imperative might force us to lower our limit to that age. However,
the lower minimum age operated by the National Lottery has not
had any noticeable impact on our business to date. We believe
this is because players see our game as a complement to the National
Lottery rather than as an alternative.
Nevertheless, this means that in practice we
apply an age limit significantly higher than that operated by
the National Lottery, but for a game that on any generally accepted
measure would be classified as significantly "softer"
than those operated by the National Lottery.
The introduction of a single minimum age would
create a simpler system for customers and operators alike. Conceivably
this would also enable simpler enforcement. However, should a
sliding scale be introduced we would urge that it is clearly linked
to the degree of risk as defined previously by the ratio of stake
to return and the opportunity to chase losses determined by frequency
Whatever system is eventually adopted, we would
request clear operational guidance. Bingonet would also urge that
any system of sanctions for transgressors should be proportionate
to their ability to determine participants' age. Moreover, consideration
could be given to introducing an offence for those minors who
knowingly attempt to deceive operators into believing that they
are of legal age. We believe that a common approach across the
betting, gaming and National Lottery sectors would aid the enforcement
of age limits.
3. The impact of the National Lottery upon
the betting and gaming industry
For the reasons outlined above, neither current
English law nor Bingonet consider Bananalotto to be gaming. Nevertheless,
we recognise that similarities exist on the basis that there is
an opportunity for a significant cash prize to be won entirely
on the basis of luck.
Unlike much of the betting and gaming industry,
we cannot compare how the introduction of the National Lottery
in 1994 impacted on our business because Bingonet only began trading
this year. However, it is our view that the introduction of the
National Lottery represented one of the most fundamental changes
in the culture surrounding gambling and gaming. Not only did this
provide industry with a much-needed incentive to re-examine its
offerings, but it also facilitated a sea change of opinion amongst
the British public. The notion of a small flutter became widely
accepted with well over 90 per cent of the UK population having
played the Lottery.
As previously stated, both Bingonet and our
players see Bananalotto as complementary to the National Lottery
on the basis that there is no stake and the prizes are generally
smaller. Therefore, we are not particularly concerned about the
National Lottery moving online provided that the Lottery is subject
to regulation that is proportionate to that which applies to other
Should the National Lottery become available
online, we would anticipate two new effects which would contribute
to the cultural acceptability of online games hosted in the UK:
expanding accessibility; and
Expanding accessibility. Allowing the
sale of tickets online will directly increase players' access
to the National Lottery. However, the question of accessibility
should also be considered within the context both of easier access
by players to more forms of gambling and access to operators who
are based overseas and therefore not subject to UK regulation.
Easier access to increased forms and varieties
will inevitably result in increased participation. It is therefore
important to ensure that participants have access to a wide range
of scrupulously operated games spanning a broad range of risk.
The Lottery, more traditional providers of gaming facilities and
new economy providers such as Bingonet all have a role to play
Clearly, the UK Government can only ensure high
operational standards on sites that are hosted in the UK. Bingonet
believes that regulation would best be achieved by providing an
appropriate level of regulation that balances the need to minimise
bureaucracy with the safeguards and reassurances that stem from
playing on a UK-hosted site.
Overseas capability. Playing the
Lottery online will inevitably bring the attention of players
to online lotteries operated in other countries. While this is
clearly an opportunity for the National Lottery to attract overseas
players, it also represents a risk that UK participants may seek
out operators based overseas either through the Internet or via
the telephone if they offer terms that are more competitive than
those offered in the UK. For this reason, any regulation should
be geared towards maximising levels of trust that UK players have
in UK operated sites while avoiding imposing bureaucratic burdens
that will adversely impact on the returns available to participants.
The most successful game on similar lines to
Bananalotto to date is Freelotto (www.freelotto.com) based in
the US, but targeted more widely including at UK residents. This
site was launched in July 1999 and by May 2000 was ranked as the
14th most popular site in the UK in terms of monthly unique visitors.
To the best of our knowledge, the dramatic growth of this site
has neither been accompanied by a loss of revenue for the traditional
gaming, gambling or State Lotteries, nor has it led to any substantiated
evidence of increased problem gambling.
Bingonet welcomes the Committee's inquiry into
the operation of the National Lottery which comes at a time when
technology increasingly allows the development of new forms of
Through Bananalotto, we have been able to create
a new business model enabled by new technologies that operate
ethically and responsibly. Participants have the opportunity to
play an exciting risk-free game, sponsors benefit from increased
flows of visitors to their web sites and the e-economy is stimulated.
Because we do not require an initial stake, we have the potential
to co-exist with the Lottery particularly if a proportionate and
balanced regulatory approach is adopted that does not stifle new
We would be pleased to expand on any of the
areas covered in our submission by giving oral evidence should
the Committee so wish.
26 For the purposes of this submission we have used
the terms "gaming" and "gambling" interchangeably
unless otherwise indicated. Back