Volume: 16 Issue: 8
The British Gambling Commission (‘GC’) published on 20 July 2017 its consultation ‘Changes to society lottery and external lottery manager operating licence requirements’ (‘Consultation’), which puts forward proposed changes to the Licence Conditions and Codes of Practice (‘LCCP’) for British-licensed gambling operators, with the intention being to increase the amount of information lottery operators provide about how and for what their proceeds are used.
“Overall the proposals represent a tightening of the regulatory framework for lotteries,’ said Audrey Ferrie, Legal Director at Pinsent Masons. “This is evident in the fact the proposed changes would be introduced as social responsibility code provisions. Compliance with these is a condition of licences. Any breach may lead to review of an operator’s licence and possibly suspension or revocation of the licence, the imposition of a financial penalty and the risk of prosecution.”
Specifically the Consultation proposes new requirements to the Codes of Practice. Firstly, operators will need to publish on an annual basis the percentage of their proceeds returned directly for the purposes of the society. Secondly, individual lotteries that are part of a branded lottery scheme must be marketed separately, and will be required to make it clear to consumers participating in the lottery which society the lottery is for, before customers buy tickets. “The requirement for separate marketing of individual lotteries within a single brand scheme, and clarity as to which scheme the consumer is participating in, are consistent with the GC’s August 2011 guidance on these points, and to that extent should not represent a surprise,” explains Susan Biddle, Legal Consultant at Kemp Little. “However the GC’s current proposal would tighten things up, as the extent to which marketing material makes clear each draw is for a separate society, the relative prominence of the umbrella brand and the name of the relevant society, and the extent to which the tickets give the name of the individual lottery, are simply relevant indicators for the purpose of that earlier guidance, but would now become mandatory.”
The Consultation further defines certain types of lottery, with the GC clarifying what it views as ‘high frequency,’ ‘low frequency’ and ‘instant win’ lotteries. “[These definitions are] in recognition of the changing nature and risk within the lottery sector and the fact that not all lotteries carry the same risk,” said Ferrie.
The proposed changes to the LCCP follow recommendations made by the Culture, Media and Sport Select Committee Inquiry into Society Lotteries in 2015. The Consultation also follows comments from GC CEO Sarah Harrison, who told the Lotteries Council annual conference in May this year that “The law requires a minimum of 20% of proceeds in a lottery to be returned to good causes […] We want operators to raise standards and to do more to make clear the scale of contributions to good causes […] it is vital that ELMs and society lottery operators ensure sufficient information to make it clear to consumers which society lottery they are being invited to participate in.”
The closing date for the Consultation is 30 September 2017.