At a meeting of a select committee of MPs on gambling in the House of Commons yesterday, Therese Coffey, Conservative MP for Suffolk Coastal, questioned the commission about its decision to give the Health Lottery permission to operate in its current form.
She asked why it agreed to issue licences to each of the 51 community interest companies that run the society lotteries that make up the Health Lottery, despite the fact that all of them have the same three directors and are registered in the same place.
"I think to the man on the street or the woman on the street that seems like one big lottery," she said. "In reality it’s just another national lottery."
Jenny Williams, chief executive of the Gambling Commission, said the Health Lottery had met the necessary legal criteria to be issued with its licences.
"They’re combined for a marketing purpose, and other society lotteries do that," she said of the 51 society lotteries that make up the Health Lottery. "If you’re saying ‘was this a scheme designed to get around the lottery limits?’ – yes, clearly it was."
John Whittingdale, Conservative MP for Maldon and chair of the select committee, said it was strange that there were caps on individual society lotteries to protect the National Lottery, but at the same time the Health Lottery was allowed to go ahead even though it was raising less money for good causes.
Later in the meeting, Coffey criticised the fact that the Gambling Act 2005 gave the Gambling Commission no choice other than to allow the Health Lottery to be set up the way it had been. "Is the government going to address that and other unintended consequences through primary legislation?" she asked.
John Penrose, Minister for Tourism and Heritage, told the committee that although it was monitoring the Health Lottery very carefully, the government had to be careful because there were good examples of other lotteries that were similar in structure.
He said an increasing number of external lottery managers were approaching local society lotteries and offering to run the lottery for them to help cut back office costs so more money would be available for good causes.
"So we would need to be really, really careful to make sure we aren’t hamstringing them, and we would need to have strong proof that the Health Lottery is doing something bad before we started to move ahead," he said.
"I’d also say that, by being innovative, the Health Lottery may have shown opportunities to other existing society lotteries that they weren’t aware of before that they may now want to copy. And if they decide they do, they might then also get very annoyed if I start closing stable doors on them just as they were about to walk through them."
A spokesman for the Health Lottery said it was significantly different from the National Lottery and was subject to different regulations. "The Health Lottery brand helps each of the society lotteries raise good cause monies specifically for local health charities and, unlike the National Lottery, gives no money to sport, arts or heritage bodies," he said.
"The Health Lottery is set up to generate some £50m of new, incremental money and, as the Gambling Commission agrees, it is properly licensed and operates within the requirements of the act."