Volume: 16 Issue: 12
The UK Government’s Department for Digital, Culture, Media & Sport (‘DCMS’) announced on 30 November 2017 that it is to ask the British Gambling Commission to prohibit, through a statutory licence condition, third party betting on non-UK EuroMillions draws; the announcement came via the DCMS’ response to its consultation on the matter (‘Consultation Response’), which was published in March 2017. The DCMS’ decision has led to criticism from some industry stakeholders, including from operators who currently offer such bets, such as Lottoland.
The move closes a loophole in the law that has allowed operators to offer betting products on the outcomes of non-UK EuroMillions draws. The move brings the law around betting on non-UK EuroMillions games in line with the existing prohibition on taking bets on the UK National Lottery, including the UK EuroMillions game, under Section 95 of the Gambling Act 2005. The DCMS notes that bets on international lotteries will still be allowed. “The wording for the licence condition which was initially proposed in the original 2016-17 Impact Assessment [published on 9 December 2016] was disproportionately broad, as it would have prevented British-based licensees from taking EuroMillions bets from overseas customers who are not even permitted to play the UK National Lottery’s version of EuroMillions, and it could also have applied to lotteries other than EuroMillions,” said Andrew Danson, Partner at Bird & Bird LLP. “The Government has said it will tailor the prohibition to ensure that it applies only on a point of consumption basis, and will not apply to future lotteries.”
In its Consultation Response, the DCMS notes its intentions in proposing such a prohibition, which include reducing the possibility for consumer ‘confusion,’ for example as a result of the blurring of boundaries between what constitutes a betting game and a lottery game, and protecting returns to good causes in the UK. “The evidence of customer ‘confusion’ between lottery sales and betting on lotteries is outdated and based upon a single advertising campaign run several years ago. Since that time the secondary lottery operators have done a great deal to ensure that the public could distinguish between the two products and, having put forward a very clear case, their voice has been ignored by the Government,” comments Carl Rohsler, Partner at Squire Patton Boggs. “The slender and subjective evidence of public confusion upon which the decision is based makes it open to criticisms, and also ignores the contribution made by the secondary lottery market to national taxes, as well as reducing consumer choice and free competition.”
Reacting to the DCMS’ decision, Lottoland CEO Nigel Birrell argues that the Government itself has admitted that the current evidence base for the decision is not conclusive and that the decision “sets a dangerous precedent for policy-making on the basis of no evidence […] it will do nothing but stifle innovation in the sector.” Birrell states that Lottoland is reviewing the options available to it before taking its next steps. Discussing whether a legal challenge is likely, Audrey Ferrie and Christopher Rees-Gay of Pinsent Masons LLP note that “It is likely that this will be a purely commercial decision for Lottoland as to whether they mount a legal challenge. The DCMS in its response states that [the decision] is justifiable on ‘both a principled and precautionary basis.’ The DCMS also agrees that the current evidence is ‘not conclusive’ and so on this basis there would be an argument against the decision; it is all dependent on who would be willing to fund what could be a very expensive legal challenge.”
The DCMS’ decision has been made in the context of a decline in sales of UK National Lottery tickets, with the UK arm of Camelot reporting in June 2017 that its lottery ticket sales fell 8.8% in the year to 31 March 2017. “It is fairly clear to those involved that the Government’s latest decision stems from a desire to protect the National Lottery’s monopoly,” believes Rohsler. “The decision ignores the fundamental right to allow betting on future uncertain events of whatever nature, and props up the artificial construct of a pan European EuroMillions lottery which is in fact a construct designed to exploit a different misrepresentation to the public - namely that the ‘EuroMillions’ product is some kind of pan European lottery when it is in fact a series of national lottery products marketed under a common brand.”