Background
Over the past few years the Commission has seen a move away from traditional paper based weekly subscription lotteries to more diverse and innovative ways of selling lottery tickets including, for example, instant win scratchcards and online electronic lottery scratchcards.
We have also seen an increase in licence applications from ELMs who are arguably more commercially-focused and business-orientated, with emphasis on promoting the individual society lotteries that they manage under a common brand. Increasingly we are finding that ELMs are applying for licences to run lotteries under a brand name and looking at ways of maximising revenue through innovative marketing and through brand awareness. The promotion of lotteries online has also increased and with that some societies and ELMs are looking at what other online gambling products might also be offered on their websites.
In some cases the products being offered may satisfy both the statutory definition of a lottery and that of gaming or betting. Sections 17 and 18 of the Act were introduced to deal with these cross-category activities and apply the following criteria:
- If the arrangements satisfy the definition of both a lottery and gaming then, subject to the next sentence and unless the lottery is promoted under a lottery operating licence or satisfies the definition of an exempt lottery, the default position is that cross-category gambling is to be treated as gaming rather than a lottery. However, if the arrangement involves more than three processes in order to win a prize then the arrangement is always treated as gaming.
- Where the arrangements satisfy both the definition of a lottery and that of pool betting or a betting prize competition, the default position is that the arrangements are to be treated as betting rather than a lottery, unless they are promoted in reliance on a lottery operating licence or satisfy the definition of an exempt lottery.
Branding
It is generally accepted that, when framing the Act, Parliament considered lotteries to be a ‘softer’ form of gambling and that betting and gaming are ‘harder’ forms of gambling. Should an ELM or society offer both a lottery and gaming or betting under the same brand, especially on-line, there are concerns that players attracted, for example to a website, to play a lottery may also be offered gaming or betting products.
By offering gaming or betting under the same branding as lotteries, there is potential for players to become confused and believe that they are participating in a lottery rather than gaming or betting. Lotteries are promoted to support ‘good causes’ and many players are supporting their chosen ‘good cause’ as well as participating in gambling when they enter a lottery. There is a risk that those attracted to a lottery branded website would assume that all activities they were participating in under the single banner on that site would be in support of good causes rather than for private gain, and would be unaware that they were participating in a ‘harder’ form of gambling.
Marketing
The advertising/marketing of a lottery brand and use of the same brand for gaming or betting products may also draw into gambling young adults (16-17 year olds) who are permitted to participate in lotteries but not gaming or betting. This concern extends to the increasingly popular ‘try for free’ games widely available on the internet.
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Principles
Last updated: 8 March 2021
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