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Fourth National Lottery Licence: Regulatory Handbook

The Commission’s regulatory handbook sets out our regulatory approach to the National Lottery.

  1. Contents
  2. Volume two: Monitoring Performance Framework
  3. 8. Condition 1: Purpose and outcomes

8. Condition 1: Purpose and outcomes

8.1 This section provides guidance related to the outcomes specified in Fourth Licence Condition 1; these outcomes are also specified within Section 6 Licences in relation to the running of individual Games.

8.2 The guidance in this section focuses on Good Causes Contribution (Condition 1.2(c)). We address the areas of propriety (1.2(a)) and Participants’ interests (1.2(b)) separately, as follows see below:

  • we set out requirements related to propriety in a number of Fourth Licence conditions, including Conditions 4, 5, 6, 7, 21 and 22. We provide further guidance related to Condition 5 in section 9, and Conditions 6 and 7 in section 10.

  • we set out requirements related to Participants’ interests in Condition 8. We provide further guidance related to this condition in section 11. Note that various other areas of the Fourth Licence may also contribute to protecting Participant interests, for example Condition 16 regarding protection of Participant funds.

8.3 In considering compliance with Condition 1.2(c), we expect to consider a broad range of evidence, which may include comparison of actual Good Causes Contributions against relevant forecasts or projections – including those submitted by the Licensee in its Application and provided under regulatory reporting requirements (see section 23) as well as any analysis conducted by us or third parties – and, where appropriate, against historical levels of Good Causes Contributions.

8.4 If Good Causes Contributions are materially lower than expected (on the basis of evidence such as that described in the paragraph above), we will seek to understand the underlying reasons for this and the extent to which the Licensee’s own conduct is likely to have adversely affected Good Causes Contributions. We will also consider whether we may have reasonably expected the Licensee to act differently and achieve higher Good Causes Contributions, whilst still meeting its other obligations.

8.5 As stated in Condition 1.2(c), any assessment may consider payments to Good Causes under the Fourth Licence and potential payments under subsequent licences. When assessing whether this outcome has been achieved, we would therefore take into account any evidence regarding the potential impact of Licensee decisions or strategies (for example, with regard to the development of the National Lottery Brand) on Good Causes Contributions in the future, including under subsequent licences.

8.6 We cannot fully define the types of evidence and analysis we expect to consider in assessing compliance with Condition 1.2(c) in advance. For example, it may depend on a range of market developments over the Fourth Licence, including unforeseen aspects of Licensee operations and behaviour. In general terms, we may have regard to evidence related to any aspects of the Licensee’s operation which have affected Good Causes Contributions or may affect future Good Causes Contributions. This may include factors affecting the volume of National Lottery sales (such as the Licensee’s approach to developing and executing its Game portfolio, distribution channels and the National Lottery Brand)

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7. General concepts used in the Fourth Licence and Section 6 Licences
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9. Condition 5: Fitness and Propriety of the Licensee
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