The government’s refusal to make changes to society lottery caps, despite research finding this could release millions of pounds for charities, is a “hammer blow” for the sector, leaders have warned.
The decision comes after research, commissioned by the former Conservative administration, found that raising the annual sales limit on lotteries from £50m to £100m per operator “would lead to a net increase in returns for good causes of between £16m and £132m”.
The figure takes into account anticipated growth of between £51m and £477m in People’s Postcode Lottery ticket sales, and a projected corresponding decline of between £25m and £148m in National Lottery sales.
In a written statement, the gambling minister, Baroness Twycross, said the government would not be making any further changes to the limit, citing potential negative effects on the National Lottery.
“The government wants a lotteries sector centred on one national lottery – The National Lottery – while continuing to support the hundreds of wider society lotteries that exist,” she said.
“This model has worked successfully for the last 30 years and created the conditions for the National Lottery to flourish and support life-changing projects, alongside a thriving society lotteries sector.”
But Clara Govier, managing director of the People’s Postcode Lottery, said the decision “beggars belief”, since the rise would have come at “zero cost to the Treasury”.
She said: “This is a hammer blow for thousands of charities across the UK, big and small, that deliver vital everyday services to those most in need.
“This is a clear failure to put the needs of the most vulnerable first and actively blocking the wishes of many of Britain’s biggest charities.”
Govier said the People’s Postcode Lottery could still grow but the way its funds are awarded would be dictated by legislation rather than need, adding that the organisation planned to meet with the minister “as a matter of urgency”.
Wendy Chamberlain, the Liberal Democrat MP for North East Fife and who earlier this year proposed a removal of the £50m society lotteries sales cap, said she was “deeply disappointed” by the government’s decision.
“The independent research makes it clear that raising the annual sales limit for these lotteries would provide a lifeline for countless community organisations, enabling them to plan better, fundraise more effectively, and deliver services that so many people rely on.
“This decision feels like a missed opportunity to back our vital charity sector at a time when demand for services is rising and fundraising is increasingly difficult.”
The government has also announced plans to introduce a voluntary code of conduct for prize draws such as Omaze, which are not regulated by the Gambling Commission but offer funding to charities.
A second study, also commissioned by the former Conservative administration and published this week, examined gambling harms and consumer protection around prize draws and competitions.
It found that making the PDC sector, which is worth an estimated £1.3bn in the UK each year, subject to Gambling Commission regulation could have a “significant positive impact” on protecting charity donations and safeguarding customers.
Just 10 per cent of PDCs’ profits go to charities at present, compared with the 20 per cent that society lotteries must give, the study by London Economics found.
But to consumers, PDCs and society lotteries are “nearly indistinguishable”, the research found, adding: “Therefore, growth in the PDC industry may have come at the expense of the lottery industry.”
The study found that a voluntary code of conduct would have a “slight positive impact” on charity donations and consumer protections.
But Twycross said the code would “help provide a uniform approach across the sector to strengthen player protections, increase transparency and improve accountability of prize draw operators”.
George Collins, chair of the Lotteries Council, criticised the government’s refusal to “create a level playing field” by subjecting large-scale prize draws to similar rules to those that apply to society lotteries.
Collins said: “This is a missed opportunity to raise more money for the nation’s good causes and to put the charity lottery sector on a firmer and fairer footing in the future.”