The Culture, Media and Sport Select Committee has launched an inquiry into society lotteries that will include looking into relaxing restrictions on the market.
The Committee said in a statement yesterday that it wished to examine the role of society lotteries, or charity lotteries, and their place within a sector that includes the Health Lottery and the National Lottery.
It will look at how to ensure the lotteries market delivers maximum benefit to good causes.
The inquiry will also consider whether there is a case for relaxing the regulatory requirements such as the minimum amount of proceeds that a society lottery has to return to good causes, which is something favoured by the lotteries and fundraising sectors.
The committee will also examine the comparative regulatory positions and protections given to society lotteries, the Health Lottery and the National Lottery.
The Department for Culture, Media and Sport announced in December 2012 that it would launch a consultation on the minimum amount of proceeds going to good causes, but this is currently on hold. The DCMS has said it is still planning to go ahead with the consultation.
Research by the Centre for Economics and Business Research, commissioned by the Lotteries Council, a membership body representing society lotteries, and the Institute of Fundraising in response to the DCMS’s consultation was published in February.
The report called on the government to relax restrictions on society lotteries, including those that limit prize size and turnover.
Under existing regulations, the maximum value of tickets that can be sold for one draw is £4m and £10m in a calendar year. Small society lotteries can offer a maximum prize in a single draw of £25,000 and for larger lotteries the limit is 10 per cent of the proceeds.
The report raised concerns that donations to good causes worth almost £90m a year could be lost if tighter restrictions were placed on society lotteries.
Philip Davies, the Conservative MP for Shipley and a member of the CMS committee, has sponsored an early day motion on society lotteries that supports the findings of the CEBR report and calls on the government to consider its proposals to relax the rules on society lotteries to allow them to grow. A total of 17 cross-party MPs are signatories to the EDM.
Society lotteries are growing and contributed £163m to good causes between October 2012 and September 2013, according to mid-year figures released by the Gambling Commission. This is up around 10 per cent on the same period the previous year.
'Compelling case for deregulation'
Clive Mollett, chairman of the Lotteries Council, said: “We wholeheartedly welcome this positive step being taken by the CMS select committee.
“This is a fantastic opportunity to discuss in more detail the recently published report by CEBR, which makes a robust case for modest de-regulation in the sector, particularly in terms of increasing the prize, draw, and turnover limits imposed on society lotteries.”
Grant Baskerville, head of public affairs at People’s Postcode Lottery, said: “We feel that there is a hugely compelling case in favour of modest de-regulation for society lotteries. In particular, the £10m annual turnover limit imposed on a single society lottery acts as a major barrier to delivering more income to good causes.”
The CMS committee has asked for written evidence from those wanting to contribute to the inquiry, which must be submitted by 6 October.
