The House of Commons Culture, Media and Sport Committee was wrong to recommend that a new class of umbrella lotteries be established, according to the Lotteries Council and the People’s Postcode Lottery.
The report, marking the conclusion of the DCMS committee’s inquiry into society lotteries, says that the existing legislation should be amended to recognise a class of umbrella lotteries that would have their own set of limits on individual draws, annual sales and prizes.
But Clive Mollett, chair of the Lotteries Council, a membership body representing charity lotteries, said: "We want to place on record our fundamental disagreement with any move to further segregate the sector by creating a separate class of so-called umbrella lotteries."
Mollett said the report underestimated the important contribution of more professional forms of fundraising and the benefit they brought to the marketing of lotteries, player recruitment and the overall sums raised.
A spokesman for the People’s Postcode Lottery, which manages society lotteries on behalf of a range of charitable bodies, said the recommendation was "misguided and potentially harmful" to the hundreds of good causes across the UK that benefited from the support of the PPL.
Mollett also disagreed with the report’s proposal to reduce the red tape on private organisations that want to run lotteries on behalf of good causes.
The report says it might be possible to establish a "light-touch regime" for existing companies that run lotteries as part of their corporate social responsibility activities rather than as a commercial opportunity.
Mollett said: "The recommendation raises serious questions, given that the select committee is calling for more regulation for fully licensed and regulated umbrella lotteries, while at the same time promoting the idea of unregulated commercial entities entering the marketplace."
But both the Lotteries Council and the People’s Postcode Lottery welcomed the committee’s recommendation that the rule dictating that lotteries must give at least 20 per cent of ticket proceeds to good causes should be spread over an extended period in the case of start-up lotteries, and its recommendation to the Gambling Commission to consider whether the limits on ticket sales and prizes should be relaxed.
"We were delighted by the recommendation to increase prize, draw and turnover limits to enable society lotteries to deliver even more for the good causes we support," said Mollett.
A spokeswoman for Camelot, which operates the National Lottery, welcomed the committee’s proposal to apply more rigorous regulations to larger, umbrella-style lotteries and supported its call for a lifting of unnecessary burdens on small, local lotteries.
"We would, however, continue to strongly oppose any increase to the current limits on ticket sales and prizes for larger lotteries that could enable them to compete directly with the National Lottery," she said.
Peter Lewis, chief executive of the Institute of Fundraising, also welcomed these proposals, calling them good news for smaller lotteries.
But he said lotteries were already complicated and heavily regulated, and that any further caps – such as the proposed 35 per cent cap on operating costs for larger lotteries – needed careful consideration to make sure they did not stymie the success of fundraising.