Culture, Media and SportsWritten evidence submitted by the People’s Postcode Lottery

Summary

People’s Postcode Lottery welcomes the opportunity to respond to the Culture, Media and Sport Select Committee’s call for evidence into the Government’s plans to merge the Gambling Commission with the National Lottery Commission.

In Great Britain, People’s Postcode Lottery is playing an ever more important role in supporting good causes and players have raised £25.6 million since 2005.1 This includes £2.46 million for Maggie’s Cancer Caring Centres, £2.2 million for Children 1^ST and £1.75 million for Missing People, to name a few.

People’s Postcode Lottery has worked closely and collaboratively with the Gambling Commission since first setting up our operations in Great Britain.

We would also like to add it is often overlooked that the Gambling Commission has played a crucial role in helping charity lotteries raise a record £126 million for good causes in 2011–12.2 This level of success could not have been achieved without a cooperative and constructive relationship existing between charity lotteries, External Lottery Managers (ELMs), like People’s Postcode Lottery, and the Gambling Commission.

Within the context of the Culture, Media and Sport Select Committee’s call for evidence, we broadly welcome the UK Government’s plans to merge the Gambling Commission and National Lottery Commission. However, there are a number of lingering concerns that we feel should be addressed prior to any merger taking place.

1. The Merits or otherwise of the Merger of these two Bodies

1.1 As People’s Postcode Lottery made clear in our previous written evidence,3 our view is that the merger of the Gambling Commission with the National Lottery Commission into a single entity makes sense both financially and in policy terms.

1.2 Most importantly, however, it is worth noting we strongly hold the view that if charity lotteries and the National Lottery were governed by the same legislation and regulator, the Government could achieve even greater optimisation and savings. Such a move would remove restrictions on the amount of money that charity lotteries can raise, with the potential to generate hundreds of millions of pounds in additional income each year for good causes across the length and breadth of Great Britain.

1.3 Various studies have shown that charity lotteries and state lotteries can grow together.4 In addition to this, given the backdrop of a 20% decline in public giving5 and cuts from central and local Government up until 2016,6 from our perspective, there is no reason why charity lotteries should not play an increasingly important role in supporting good causes in Great Britain.

1.4 As part of this, People’s Postcode Lottery is committed to working with the Gambling Commission, Government and our sector partners to help promote and support the sustained growth of charity lotteries in Great Britain and the money our players raise for good causes.

2. Any Potential Conflict of Interests which might arise as Result of a Merger and the Governance Structures which might Overcome these

2.1 People’s Postcode Lottery has some concerns relating to the merger of the Gambling Commission and National Lottery Commission that in our view constitute potential conflicts of interest.

2.2 In particular, on occasion, the Gambling Commission and National Lottery Commission have held opposing views in relation to the growth and development of the charity lottery sector. During the course of 2008, when the UK Government was consulting on plans to increase the limits on the proceeds of any single society lottery draw from £2 million to £4 million, the National Lottery Commission (NLC), Camelot Group and Sport Scotland made clear that they “felt there was no clear case or evidence base to support an increase in prize limits on society lotteries”.7 On the contrary, the Gambling Commission, UK Government, Lotteries Council, Hospice Lotteries Association, People’s Postcode Lottery and a number of others supported the decision to increase the monetary limits imposed on charity lotteries.

2.3 The position of the NLC, Camelot Group and Sport Scotland is difficult to understand when all charity lotteries combined comprise less than 5% of the total revenues (£6.5 billion in 2012) generated by the National Lottery. As you well know, in the end, the charity lottery sector was successful and the variation was implemented by the Government. However, this scenario does pose an interesting question in terms of how any future review of monetary limits might be taken forward.

2.4 As stipulated in an explanatory memorandum,8 produced by the Department of Culture, Media and Sport (DCMS) on the increase in monetary limits, in 2012 the Government was supposed to instruct the Gambling Commission to undertake a report on the impact of the variation. After speaking to the Gambling Commission recently, it was confirmed no such instruction has been given. Obviously since the variation was implemented we have had a change in Government, however in our view there is no reason why DCMS should not instruct the Gambling Commission to take forward this report.

2.5 People’s Postcode Lottery believes that if a report on the variation on monetary limits was completed prior to any merger between the Gambling Commission and National Lottery Commission, this would be a positive starting point to addressing any potential conflict of interest. Second to this, we would expect the Government to outline a reasonable timetable for a review of the monetary limits imposed on charity lotteries to be completed this year and repeated every three years thereafter.

2.6 People’s Postcode Lottery is confident that if and when the Gambling Commission’s report is completed, it would highlight that charity lotteries do not represent a risk to the National Lottery and year on year we have been able to increase the actual amount donated to good causes. From our perspective, on this evidence base, we would strongly urge the Government to consider what other forms of fundraising are limited in how much they can raise for good causes. As to our knowledge, there is no other example.

3. The Readiness of the Gambling Commission to Integrate the National Lottery Commission into its own Structure

3.1 Based on the example provided above of where the Gambling Commission and National Lottery Commission have had diametrically opposed views, People’s Postcode Lottery has some concerns as to what this might mean for the future growth of fundraising from charity lotteries in Great Britain. From our perspective, with decreases in individual giving and a challenging climate for public finances, the Government has an unprecedented opportunity to mobilise charity lotteries to provide ever increasing levels of support to good causes across Great Britain.

May 2013