The Health Lottery has expanded the lottery market and may divert a greater percentage of its income to good causes, according to its chief executive.

In an exclusive interview with civilsociety.co.uk, the Health Lottery's CEO Martin Hall (pictured), said that the lottery had made £3.6m for good causes in the first six weeks.

Concerns have been raised that the Health Lottery could divert players from the National Lottery, from which a bigger proportion of ticket sales goes to charity, but Hall said the early signs are that this is not the case.

Retailers, said Hall, have indicated that ticket sales to the National Lottery had not been negatively impacted by the new entrant. “They all say there is no negative impact at all,” he said. “We’re adding to the pot.”

He said that criticism of the National Lottery when it launched had been similar to that of the Health Lottery, but that the entry of a new player into the market raises the profile of lotteries generally.

“I understand the fear because we didn’t half appear with a bang. That was our intention: to appear in the marketplace and establish our intention to bring the consumer along with our brand and establish the game first,” he said.

“We’ve been talking to charities and asking whether they’ve seen any negative impact on their [in-house lottery] volumes, they have said no. We asked ‘have you seen positive impact on your volumes?’ ‘Yes’ is the answer.”

Camelot is unconvinced

But Camelot, which operates the National Lottery, is not convinced of the claims that the Health Lottery is expanding the market, noting that it has not released any sales data that refers to the period since the new lottery has been in operation. A spokeswoman for Camelot said that it would be difficult to attribute any spike to the new player because during the period there have been large prize draws which often bring non-regular lottery players into the game.

Camelot also confirmed that it has complained to the Gambling Commission about the Health Lottery, believing that it is not acting as a society lottery.

Hall, however, said that opposition from Camelot was to be expected. “Two and a half years ago we knew the first route that Camelot would take would be a legal challenge,” he said. “We’ve always known that it was coming. I suspect that even if we get a clean bill of health that won’t be the least we’ve heard from Camelot.

“This licence was not granted overnight. It was granted after a great deal of careful consideration to ensure that we’re not only adhering to the law, but to the spirit of the law.”

In a statement Camelot said: “We have co-existed peacefully with society lotteries for many years now and hope to continue to do so in the future. We also welcome fair and vigorous competition. However, we have reservations about any attempt to commercialise society lotteries in ways that appear to cut across the spirit and the letter of both statute and regulation. As custodians of the National Lottery, it is our duty to act in the interests of fairness and the good causes.

“Given the information which has come into the public domain since the Health Lottery’s launch – and in light of the Gambling Commission’s recently-published Advice Note on the operation of society lotteries – we therefore had no option but to write to the Commission detailing the concerns we have about the lawfulness of The Health Lottery and asking it to carry out an immediate review.”

Camelot also said it was concerned about the independence of the 51 community interest companies which work with the Health Lottery, noting that all have the same three directors  and that each CIC has the same registered virtual office. Earlier this week Camelot announced it had raised a record amount in a six-month period, ending 24 September 2011, of just shy of £1bn.

Charity grant interest

At the six-week point, Hall said, more than 2,000 charities had made enquiries to the People’s Health Trust about grants.

“I also understand that we’ve had quite a lot of grant requests from hospices,” he added. The Hospice Lotteries Association in particular had been critical of the structure of the Health Lottery, fearful that it would take players away from small hospice lotteries on which many organisations depend.

Increasing the lottery amount

The new lottery has come under fire for diverting a smaller proportion of ticket sales to charities than the National Lottery, but Hall said that his lottery is constantly reviewing this, and that there could be capacity for increasing the percentage which goes to good causes in the future.

The number of society lotteries involved in the Health Lottery could also expand, Hall said. “We could expand beyond the 51 [current lotteries]. We could open up our retail network to local society lotteries who might be interested in being sold through retailers. That would be a great thing to do with the network.”

He said that the Health Lottery will be looking to innovate beyond the “core game”, and potentially throw its marketing weight behind things like fundraising runs in which runners wear wigs, which are used in the branding of the Health Lottery.

Richard Desmond, media owner and investor in the Health Lottery, said Hall is interested in creating a sustainable source of income for charities and does not expect to receive a commercial return within the first three years.

“Lotteries are difficult,” said Hall. “My message would be, get in touch, talk with us. We’re friendly. We’re nice people.”