The future of the National Lottery competition launch
This document was published October 2nd 2020 and was accurate at the time of publication. The competition timeline is subject to change.
In its first quarter of a century, The National Lottery (opens in new tab) has raised more than £41 billion for 565,000 good causes, transforming lives through its contribution to the arts, sport, heritage and communities up and down the UK. Building on this success, today the competition to award the fourth National Lottery licence begins.
There have been three competitions for the licence to run the National Lottery and the current licence is due to expire in 2023. The role of the Gambling Commission is to run the National Lottery licence competition and, subsequently, regulate the next licence.
Since launching the fourth licence programme in November 2018, we have conducted an extensive programme of global market engagement through which we have spoken to many interested parties to help us develop our thinking on policy issues.
This document provides an overview of the programme to-date, while also setting out the next steps as we progress through the competition. You will also find a summary of the most significant changes that will be introduced for the next licence.
These changes will enable the next licensee to continually develop and adapt its operations in a safe and responsible way, to meet the needs of players in 2023 and beyond.
We have a strong track record of safeguarding the National Lottery and ensuring that it is run with integrity, protects players and maximises contributions to good causes.
We want to build on the tremendous success of the National Lottery and we are determined to run a fair and transparent competition process that provides opportunities for innovation and creativity while protecting the unique status of the National Lottery.
Throughout our market engagement, we have been encouraged by a healthy level of interest from a range of different parties and we look forward to running a competitive process.
If you would like to find out more about the competition or want to speak to our team, further information can be found on the fourth National Lottery licence competition website (opens in new tab).
Foreword by Neil McArthur, the Gambling Commission’s Chief Executive.
Our regulatory duties
The Gambling Commission is the UK’s independent, statutory body responsible for awarding the licence to run the National Lottery and tasked with regulating it to ensure safe and fair play. The current licence is due to expire in 2023.
As part of our responsibility as a regulator, we have three overriding statutory duties:
- Ensuring that the interests of all players are protected.
- Ensuring the Lottery is run with due propriety.
- That returns to good causes are maximised.
Whilst the Gambling Commission is responsible for managing the competition and regulating the National Lottery, the distribution of funds it generates is separate.
This is carried out by independent distribution bodies, overseen by the Department for Digital, Culture, Media & Sport (DCMS) (opens in new tab) and the devolved administrations.
Changes in the fourth licence
Designing a licence that focuses on performance
The competition to award the fourth National Lottery licence is now underway. The next licence will begin in 2023.
The context for the National Lottery has changed since 2009, when the third licence was awarded. For example, technology-based products and services have been widely introduced and continue to change rapidly.
Since 2018, we have been carrying out an extensive programme of global market engagement to help inform the design of the next licence. We appointed Rothschild & Co as lead adviser, responsible for engaging interested parties ahead of the launch of the competition. Through these conversations, we have gained invaluable insight that has helped us design a licence to maximise contributions to good causes.
In addition to potential licensees, we have been engaging with key stakeholders, including the organisations responsible for distributing National Lottery funds, to keep them informed of progress and ensure their views are incorporated into the next licence.
We are seeking to create a level playing field for all potential applicants and will run a fair, open and robust competition to help us meet our statutory duties with regard to propriety, player protection and contributions to good causes. This report sets out the most significant changes in the fourth licence, all of which will build on the National Lottery’s amazing legacy, towards a sustainable and successful future.
The next licence will begin in 2023. Building on the National Lottery’s success to-date, we will ensure the licensee’s incentives are closely aligned with contributions to good causes. We will also provide it with the flexibility it needs to continually develop and adapt its operations in a safe and responsible way, to meet the needs of players and maximise contributions to good causes in 2023 and beyond.
Recognising that the world is likely to be very different by the time the fourth licence concludes in 2033, the next licence will enable and incentivise the licensee to adapt, in a safe and responsible way, according to technological advancements, new opportunities, and changes in consumer preferences.
Our approach to regulation will ensure there is clear accountability for the National Lottery’s performance. This will enable the licensee to focus on delivering agreed outcomes by providing the flexibility needed to maximise contributions to good causes, while ensuring that objectives are achieved hand in hand with safe and fair play.
The following is a summary of the most significant changes that will be introduced for the fourth National Lottery licence.
1. Player protection
The licensee will be held fully accountable for protecting players.
Through the competition process, the successful applicant will have demonstrated high standards of player protection, commensurate to its games offering, including on prevention of underage or excessive play, and we will hold them accountable for their commitments during the licence period. We will retain strong enforcement powers and will use them if necessary.
2. Monitoring performance
The licensee will be empowered to respond to technological advancements, new opportunities, and changes in consumer preferences.
The licensee will be more accountable for compliance, however, they will be required to provide annual, and ad hoc, assurance statements to the Commission to evidence how they have met their obligations. We will have strong enforcement powers and will intervene, when necessary, backed by a comprehensive system of monitoring and reporting.
3. Incentive mechanism
Since the National Lottery’s inception more than a quarter of a century ago, more than £41 billion has been raised for good causes.
We will build on that success through a restructured incentive mechanism which will ensure the licensee’s incentives are closely aligned with contributions to good causes. The licensee will, therefore, be incentivised to develop and grow National Lottery sales and, thereby, its own returns and the contribution to good causes.
4. Length of licence
The licence will run for a fixed 10-year period. There is no provision for the licensee to request an extension.
This means that the licensee will have a clear period for investment planning. A ten-year fixed term will also create a competitive environment which will benefit the long-term interests of the National Lottery.
This fixed period will incentivise the licensee to adapt, in a safe and responsible way to:
- meet technological advancements
- new opportunities
- changes in consumer preferences.
5. Channels of sale
The outcome-based approach in the fourth licence will provide the licensee with flexibility to innovate, whilst ensuring they continue to meet high standards of player protection and propriety.
The licensee must ensure players can easily enjoy games through a range of sales channels. For example, they will need to maintain a physical point of sale in postcode districts with more than 2,000 residents.
The National Lottery is a national asset. This is backed up by research which shows that 98% of people in Great Britain have heard of the National Lottery. The research involved YouGov (opens in new tab) ratings data, collected from a sample of 8,823 panellists between June 2018 and June 2019.
The licensee is responsible for maximising the appeal and accessibility of National Lottery products to those who are eligible to play.
In the next licence, we will streamline the process for games approval to allow greater flexibility and improved time-to-market. We will safeguard key features of the National Lottery. For example, by ensuring that the licensee guarantees at least one draw-based game, with life-changing prizes, every week.
This timetable is provided for general guidance. All dates are indicative and subject to change.
|Selection Questionnaire||August 2020 to October 2020|
|Invitation to apply||October 2020 to July 2021|
|Announcement of preferred applicant||September 2021|
|Fourth licence award||October 2021|
|Transition period||October 2021 to July 2023|
|Fourth licence begins||August 2023|
Get in touch
If you would like to hear more about the competition, you can contact the team.
Call 0121 230 6666.
If you have a disability which prevents you from using these methods, we can help you to make your request over the phone.
Last updated: 18 January 2023
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Following an audit the 'the fourth National Lottery licence competition website' link has been updated.