It is fair to say that the deregulation of charity lotteries has been an issue for decades. Though improvements were made in the 2005 Act, lotteries are arguably the most regulated area of fundraising. We passionately believe that their growth is being hindered by unnecessary, disproportionate regulation and this is deeply affecting the amount of money being raised for good causes. So we decided to write a report to look at the whole lottery landscape and consider how the situation could be improved, creating a win/win for the government, charities and, most importantly, people in need.

Lotteries have been a staple part of the fundraising scene for years. Over the last decade, charities have taken some of the most effective fundraising mechanisms like direct debits, direct mail and door-to-door recruitment and blended them with lotteries to create new income streams. As some techniques waxed and waned, it was lotteries that carried on bringing in the money. 

Our research with people in the sector shows two in five say their income from lotteries has increased over the last two years, with a third expecting an increase in the next two. But just over half of respondents think lotteries are the most regulated form of fundraising. What we can scarcely believe is that there's more regulation involved in setting up a charity lottery than setting up a charity itself. In fact, the regulation is the same as it would be to if you were setting up a casino.

The main reason charity lotteries are so highly regulated is to protect the National Lottery from competition. This is a lottery with prizes in the millions, national TV exposure and over £6 billion in annual sales. It’s like protecting the U.S military from the threat of Iceland.

Another major reason is to protect against problem gambling, but even the government's own research shows there's neglible evidence that lotteries have anything to do with this.

We've looked at the lottery arena, spoken to people across the sector and written our report based on the evidence and opinions we gathered. We've also made some recommendations we believe can begin to achieve what we're all striving for; more money being raised for good causes.

Keep the 20% minimum contribution rule, but average it over 3 years

Currently each and every charity lottery must make a minimum contribution to the cause (i.e. make a profit) of 20%. We're think that this should be averaged over a three year period. This would allow charities to recruit more players, meaning they could raise more money in the long term and still stick to the 80:20 rule over time.

Let lottery ticket purchases quality for Gift Aid

HMRC rules say that any benefits received for a donation must be less than 25% of the total value of the amount given. We're suggesting that if prizes were less than 25% of turnover, tickets could be eligible for Gift Aid, collectively keeping to HMRC regulations. Alternatively, once a prize is drawn, the tickets of those who didn’t win prizes could qualify for Gift Aid

Make it easier to register and run a charity lottery

Currently, it is as difficult to register a lottery above £20,000 as it is to run a casino. Worse still, a lottery run online and on paper needs to be registered twice. Our report recommends one simple registration process.

Remove the limits on turnover and prizes as the National Lottery doesn’t need protecting

There is a cap on charity lottery turnover of £10 million, but the National Lottery takes in £6.5 billion a year. Even the Health Lottery is only around 1% of the size of the National Lottery. Therefore, we see no reason to the limit size and turnover of charity lotteries.

Make lottery regulation proportionate to a lottery’s size

The smallest lotteries should have little regulation, increasing proportionally with size. If a lottery reaches the billion pound income mark, only then should it be regulated the same way as the National Lottery.

We want to see a win/win where the amount raised for good causes from all lotteries is increased. This can be done, just by reducing the regulatory burden and restrictive legislation. We want to see proportional regulation and it doesn't need to be the lose/lose situation painted by the Gambling Commission and the government.

The goal of all lottery regulation should be to maximise income for good causes. So let's get started.