The Health Lottery, launched by Richard Desmond, has survived a High Court challenge but still faces regulatory questions, as Stephen Cook reportsThe media owner Richard Desmond declared himself delighted when the High Court recently dismissed an application by the National Lottery operator Camelot for a judicial review of the licensing by the Gambling Commission of his latest enterprise, the Health Lottery.
Camelot had claimed that the 51 society lotteries operating under the Health Lottery banner were in reality a single lottery and that licences should not have been granted. But it received short shrift from the two judges, who also said it had failed to be candid about the delay in its application to the court.
But the hearing also revealed an aspect of the case that in other circumstances would not have been brought to light – the fact that the commission decided in June to conduct a review of the licences granted to the 51 community interest companies that run the separate lotteries and have so far distributed £23m to charities.
Normally the commission says nothing about such reviews unless and until they result in action on its part, which can range from advice to a suspension or revocation of a licence. But in this case, details were given to the court and published in the judgment.
The review resulted from research by the commission to establish whether the public was aware that the Health Lottery was not a single lottery but a scheme that manages 51 society lotteries that operate in rotation and each represent a different area of the UK.
The commission’s staff found that only 60 per cent of retailers of Health Lottery tickets had any marketing material on display that included this key message, 89 per cent of them were unable to say which lottery was being promoted in the week in question and 70 per cent were unable to say correctly where people could find out.
Other questions revealed that 40 per cent of retailers had received training about the Health Lottery and about 25 per cent had received visits from lottery staff.
These results prompted the commission to tell the Health Lottery that it was conducting a review of the CICs’ licences because its preliminary finding was that their activities were conducted "in a manner that was inconsistent with the licensing objective that gambling should be conducted in a fair and open manner".
It went on: "The combination of the heavy umbrella brand marketing and the apparently ineffective promotion of the individual lotteries at the point of sale appears to the commission to run the serious risk of the potential player not realising that they are participating in the particular society lottery rather than a single health-related lottery."
The commission declines to say what stage its review has reached. But given that it has not published notice of any action, the review must either have been discontinued without any action or still be under way. The latter appears to be the case, given that a Health Lottery spokeswoman says it is continuing to work closely with the commission on compliance issues.
She declines to be more specific. But sources have indicated that the Health Lottery is trying to ensure that explanatory posters are put up in shops and is deploying staff to train retailers.
Negotiations are also understood to be continuing about whether it should commit itself to "ensuring" that ticket buyers are fully informed rather than to the lesser standard of "making best efforts".
The Health Lottery has survived the Camelot challenge, but is not yet entirely out of the regulatory woods.
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