Published: October 15, 2023

UK Gambling Commission's director of policy -Ian Angus- gives update on the society lottery sector

Lotteries Council - Ian Angus speech

11 October 2023Speech by Ian Angus

This speech was delivered by director of policy Ian Angus at the Lotteries Council on 11 October 2023.

Please note: This is the speech as drafted and may slightly differ from the delivered version.

Morning all, thank you to Tony and the Lotteries Council for inviting me along to speak today on behalf of the Gambling Commission. I want to start by just giving a brief update on the society lottery sector before giving you an update on our current consultations, upcoming consultations, and then a look into 2024 and beyond.

Society Lotteries or Charity Lotteries play an incredibly important role in our communities, raising large sums of money for good causes up and down the country. During the past few years, we’ve been through a pandemic and now a stubborn hit on the cost of living that has affected people the length and breadth of Great Britain. I know many of you here today will have been using money raised to help those most in need given the situation and I think I speak on behalf of everyone when I say thank you for your hard work.

Now I know my colleague Sarah Gardner spoke at your annual conference earlier in the year and spoke about the finances of both the society lottery sector and the gambling sector as a whole, but I really do think it’s worth reiterating these stats.

When we look at gambling across England, Scotland and Wales, I think the first thing that becomes apparent, is that despite the upheavals and traumas of recent years, it’s relatively clear that the British market looks and feels like the mature licensed market that it is. When we look at the stats we have published on participation in gambling in Great Britain we see:

  • the year to end of March 2022 saw Gross Gambling Yield (GGY) at £14.1 billion
  • and when we look at participation, the year to end of March 2023 saw 44 percent of adults taking part in a gambling activity in the last 4 weeks.

Beyond this, the land-based gambling participation rate for the last year remained statistically stable at 27 percent and online has also remained statistically stable at 26 percent. So, although the long-term trend is still for growth online, there is no explosion in online participation. But how do those overall trends compare when we then focus in on the Society Lotteries sector?

  • in year to March 2023, 13.4 percent of adults had participated in a charity lottery in the last 4 weeks. This has increased from 10.8 percent in 2018 and was one of the only gambling activities not to see a significant decrease in participation during the Covid-19 pandemic
  • participation in charity lotteries increases with age. In 2022 participation in charity lotteries was 17.3 percent amongst those 65 year old and over, compared to just 3.0 percent amongst those aged 16 to 24
  • thirdly, females are more likely than males to participate in charity lotteries, with 16.2 percent of females playing compared to 10.5 percent of men in year to March 2023. This is one of the only gambling activities to have a higher participation rate amongst females than males, Bingo being another notable one
  • finally, in year to March 2023, around three fifths, or 63 percent of people participated in charity lotteries online against one third or 34 percent participating in person. This balance has shifted over time with more people choosing to take part online rather than in person.

Now as many of you will know, smaller society lotteries are licensed at the local level, not by the Commission. At our last estimate in 2016, we thought there were around 50,000 registered with local licensing authorities alone. But there is a huge range of society lotteries, ranging from tiny, local lotteries supporting a Parent Teacher Association or local church, to lotteries with proceeds into the tens of millions of pounds. Indeed, there is one scheme that combined, leads to them being in the top 10 gambling operators in the entire GB market.

So those figures show society lotteries as a whole continue to make up a good chunk of total gambling GGY in Great Britain, which as I mentioned, is currently around £14 billion.

So, onto the White Paper. As many of you will know, the Government published its Gambling Act Review White Paper in April. It runs to 268 pages and has more than 80 workstreams, of which the Commission is either leading on or supporting over 60. With such a large body of work this will not be the work of a few months, but we are clear that making progress at pace is both important and achievable. But how will change be made?

Firstly, legislative change made by the Department for Culture, Media and Sport (DCMS). This will be through both primary legislation, when parliamentary time allows, and through secondary legislation, such as in the case of the statutory levy. Whilst we’re on the levy, we are expecting DCMS to launch their consultation on the levy soon, which will be your chance to make your case. Our advice to the Government on the Levy will also be published.

Secondly, the White Paper calls for voluntary steps to be taken by others, including industry. The most high-profile area which may affect you is the creation of an Ombudsman scheme. As many of you will know the current state of play is that the industry have been challenged to design an ombudsman that is fully independent in line with ombudsman association standards, and is credible with customers. Only when we and DCMS are satisfied with its scope and independence, will we explore how best to make sure that customers of all licensees have access to it.

And this leads me nicely onto the third way in which changes will be made, which is through changes to our Licence Conditions and Codes of Practice (LCCP) - our rule book for licensees. Now we do have to consult before we make any changes to that document which is why there will be a number of consultation windows over the next couple of years.

After the publication of the White Paper, the Commission moved quickly into the first set of consultations connected with our commitments, publishing these in July. I’ll just give you a quick reminder of what those four consultations are and then an update on the responses we’ve had. So, the four consultations cover:

  • age verification in premises – where we are consulting on removing the current exemption from carrying out age verification test purchasing for the smallest gambling premises and changing the relevant ordinary code (good practice) elements of our LCCP to say that licensees should have procedures that require their staff to check the age of any customer who appears to be under 25 years old, rather than under 21 years old
  • removing features which increase intensity of play on non-slots casino games online – where we are consulting on a series of changes to existing Remote Gambling and Software Technical Standards and new requirements, in order to reduce the speed and intensity of online products while making them fairer and increasing consumer understanding about game play
  • improving consumer choice on direct marketing and cross-selling, specifically introducing a new LCCP requirement to provide customers with options to opt-in to the product type they are interested in and the channels through which they wish to receive marketing
  • financial vulnerability checks and financial risk assessments – where we are consulting on new obligations on operators to conduct checks to understand if a customer’s gambling is likely to be harmful in the context of their financial circumstances, in the form of frictionless financial vulnerability checks and financial risk assessments.

We are also consulting on non White Paper related topics, including changes to regulatory panels, where we are consulting on a number of changes to the composition and decision-making processes of the Commission’s Regulatory Panels.

So, you may be wondering how these areas apply to your work. Well, with the first couple, on age verification and non-slots casino games online, there will probably be very little in terms of impact as most of you won’t have physical premises, nor will you offer casino games. Where there may be slightly more impact is on the last two I mentioned, cross selling and financial risk and vulnerability. Whilst most of you will not be selling other more riskier products compared to say an operator marketing online slots, there is the potential for some of you to be impacted by this.

We have met with a variety of stakeholders and are aware of some concerns that the direct marketing proposal may pose a challenge in some sectors, such as lotteries. We have taken these concerns on board but also strongly encourage you to flag any issues or concerns through a written submission to the consultation.

Most of you don’t offer online instant win lottery products so will not be in scope for financial risk checks. But again, there is a potential impact for a small number of you.

I hope I’m not surprising anyone by saying that these consultations close a week today (18 October 2023) – I hope as many of you as possible have submitted a response, and for those of you who haven’t yet, I hope you have the chance to do so over the next week.

I know many of you will also have fed into the Lotteries Council response, especially if you are a very small lottery or if the lottery is only small part of your fundraising strategy, but I want to say that this is as valid a submission as any and we understand the reality of how you can share your views. Just to add, we have had over 1,800 responses so far, so we’re really encouraged by the level of engagement.

Some of you may be interested in some of the non Gambling Act Review (GAR) consultations which we closed earlier this year as well, especially the consultation on suicide reporting. So I wanted to say that the responses have been considered and we are hopeful the response document will be published soon.

Now, moving onto the next tranche of consultations. We are already moving forward to the second round of consultations which we expect to publish in early Winter. Although not yet finalised, I can tell you that this tranche will contain important opportunities for people to have their say on proposals including:

  • Socially Responsible Incentives - ensuring that incentives like bonuses and free bets are constructed in a socially responsible manner that does not exacerbate the risk of harm
  • Gambling Management Tools - including whether it is appropriate to make online deposit limits mandatory or opt-out rather than opt-in
  • Regulatory returns – my colleague, Ben Haden who is the Director of Research and Statistics recently published a blog on our website which explains the reasoning behind the changes, but we will consult on increasing frequency of regulatory returns, and removing a significant number of items that are out of date or not useful.

Finally, I want to just mention 2024. As we move into the new year, we’ll begin to see some of the more substantive changes start to come into effect as consultations publish responses. There will be changes to the LCCP after we review the submissions received, development of an ombudsman scheme, and we will continue to make progress with further consultations. So, it will be an incredibly busy year but one we hope will be an incredibly important year in continuing to make gambling safer, fairer and crime free.

I know most, if not all of you will be worried about the impact of competitors, especially prize competitions and free draws. As the Government’s White Paper said, these prize competitions and free draws offer significant prizes and operate in ways which could not have been foreseen in 2005. Their advertisements are seen on our TV screens, heard on our radios and pop up when scrolling through social media. There are very few safeguards to prevent minors from playing. They offer incentives such as multi-buy and encourage people to join quickly and purchase a large amount of tickets.

In our GAR advice to government, we make mention of some of the intelligence and complaints we receive, with 549 reports about 386 entities since 2019. We have published a number guidance documents on our website on fundraising, raffles and lotteries, lottery scams and frauds. In the September edition of our quarterly bulletin to local authorities, we flagged ongoing issues with illegal lotteries, and how local authorities can report them.

At the moment, there’s nothing the Gambling Commission can do about 'genuine' prize competitions or free draws as we have no regulatory remit over them. However, we do have powers to act where they cross the boundary and are in fact illegal lotteries or other forms of unlicensed gambling.

We will continue to work with yourselves and local licensing authorities to take enforcement action if needed, so please do let us know if you come across anything you believe to be illegal. Government committed to, and I’ll quote “consult on the potential for regulating large scale prize draws with a view to identifying options and developing an evidence base against which their impact and the extent to which different regulatory measures would be proportionate can be properly assessed.”

So, this isn’t in our gift at the Commission. This will be one of the consultations run by the Department, but we are supporting them with their work in this area. Our advice did recommend changes to primary legislation, making it clearer what constitutes an illegal lottery, free draw or prize competition but also states there is some flexibility within the 2005 Act to change what is regarded as a lottery, as well as what is regarded as payment to enter. This would provide the Commission with a stronger basis to work from.

Another relevant area for me to touch on has been the Government’s request that the sector move to 18 plus, from 16 plus, on a voluntary basis. There are a few areas in the White Paper that mention the need for parliamentary time, and this is one of them. So until there is time to mandate this change in legislation I know the Lotteries Council have encouraged members to make this change and the notifications we are receiving regarding rule changes show this happening, so I want to take the time to thank you for your support on this.

I also think it is worth briefly touching on the Gambling Survey for Great Britain. The Commission has relied on the NHS’ Health Survey Data from 2018 along with the quarterly telephone survey. If you have watched our appearance in front of the DCMS Select Committee last month, you will have seen Tim Miller, who is Executive Director for Policy and Research and Senior Responsible Officer for the Gambling Act Review, discuss this and some of the reasons we are moving towards a new model.

Both sets of data have been useful, but also have their limitations. The quarterly telephone survey we used was a relatively small sample size but allowed us to track data in more real time. With the NHS Health Survey data, as health is a devolved issue there was some inconsistency across England, Scotland and Wales and because of the time it takes to get through NHS digital, the data was often slightly out of date.

So why is this important? And what is changing? Well, we are currently working on our new gold standard for collection of data on adult gambling participation and the prevalence of problem gambling, the Gambling Survey for Great Britain. This will be the largest survey of its type into prevalence and participation of gambling anywhere in the world with 20,000 responses a year when it is fully up and running. This will give us more accurate and up to date information, leading to better regulation across the sector. We are currently in fieldwork and will start publishing new data in the Spring of next year.

I hope this has given you a bit of a flavour of what’s happening across the Commission as we move into a very busy period in implementing the government’s White Paper. It’s important you use the consultations to land your arguments, especially on issues I know you feel strongly about, such as the levy and prize competitions.

The Commission will continue to work with you and other operators across the industry to keep gambling safe, fair and crime free. I thank you for your efforts in this and for your efforts supporting good causes and millions of beneficiaries across the country.

I know I have left a bit of time so I am happy to answer any questions you may have.

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