On 16 July 2019, the Government published a response to its consultation on whether to increase the amount of money that society lotteries can raise for good causes.
There are two types of permitted society lotteries: small and large. Small society lotteries do not require a licence from the Gambling Commission but must be registered with local authorities. They operate within defined thresholds of per draw sales not in excess of £10,000 and annual sales not in excess of £250,000. Large society lotteries are regulated by the Gambling Commission, with limits of a per draw size of £4 million, a maximum prize of £25,000 or 10% of a draw's proceeds and an annual limit of £10 million. They are also required to return a minimum of 20% to the good cause(s) they support, with the remaining 80% split between prizes and expenses.
In its consultation, the Government asked the Gambling Commission to consider three objectives in giving its advice:
- that the regulatory framework should not be overly burdensome, and new entrants to the society lotteries market should not face unnecessary barriers;
- that public trust and confidence in society lotteries and the good causes with which they are associated should be maintained; and
- that reform should not jeopardise the position of the National Lottery and its returns to good causes.
The society lotteries consultation ran from June to September 2018. The Government outlined the following changes it will make to the large society lotteries in its response:
- for individual per draw sales limits, the current limit of £4 million will be raised to £5 million;
- for individual per draw prize limits, the current limit of £400,000 will be raised to £500,000; and
- for annual sales limits, the current limit of £10 million will be raised to £50 million.
The Government will not be making any changes for small society lotteries. It felt that increasing the limits would increase the amount of lotteries operating in the small society lottery regime which would be too burdensome for local authorities to have to deal with. In terms of large society lotteries, the Government acknowledged calls from the lottery sector to increase annual sales limits to £100 million. However, it felt that the current regulatory framework may not be "sufficiently rigorous" for societies raising funds at this scale. Therefore, the Government intends to launch a further consultation looking at giving large society lotteries the choice of a £50 million or £100 million annual licence, with regulatory requirements in proportion to their size.
The Government intends to lay out draft legislation this autumn (amending the Gambling Act 2005) to make the changes outlined above with the intention that they take effect in 2020. Separately, the Gambling Commission will need to amend its licence conditions and codes of practice.