Limits on the prizes offered by society lotteries should be lifted if it can be demonstrated that the move would not have an adverse affect on the National Lottery, a group of MPs has recommended.
The Culture Media and Sport Committee said in its report The Gambling Act 2005: A bet worth taking?, published yesterday, that the current limits should be reduced or removed if it cannot be demonstrated that they are needed to protect the National Lottery.
Society lotteries are forbidden from offering prize pots of more than £400,000 per lottery or from running any game with a turnover of more than £4m. This is to stop them from competing with the National Lottery, which was established as a monopoly in the 1990s and makes £6bn a year in sales.
But the MPs also suggest that, if the limits are increased, society lotteries should be subject to the same 12 per cent tax as the National Lottery.
Joe Saxton, co-founder of the consultancy nfpSynergy, who has been pushing for reform to allow society lotteries the right to offer larger prizes and whose organisation has been working on a report about society lottery reform that is due to be published later this year, said the committee report proposed tiny benefits for society lotteries.
It would be "the ultimate travesty" if they were forced to pay a 12 per cent duty, to which no other form of fundraising is subject, he said.
"Behind this lies the sense that we must protect the National Lottery, which is a little bit like saying we had better make sure the US military is not being threatened by Iceland’s military," said Saxton. "Society lotteries are so small compared with the National Lottery – they have so few resources and none of the television coverage that saying they are any threat to the National Lottery is virtually ludicrous.
"It seems a paradox when people say we must protect the National Lottery to help it raise money for good causes and one of the ways is to stop charities raising money for their good causes. That is almost perverse."
The select committee report says the Health Lottery "appears to us to accord with neither the spirit nor the intention of parliament as set out in the National Lottery Act 2006 and the Gambling Act 2005".
But MPs say they are unable to comment on its legality due to the ongoing application by Camelot, the lottery operator, for a judicial review of the Gambling Commission’s oversight of the Health Lottery.
The committee says the government should provide clarity on what constitutes a national lottery and what is a local lottery connected to other local lotteries.
A Health Lottery spokesman said: "We are surprised and disappointed that the committee has come to this view given that the Health Lottery has been licensed by the Gambling Commission since 2010 and meets the criteria of the 2005 act.
"We have worked closely – and continue to work closely – with the Gambling Commission in order to ensure our compliance."
A spokeswoman for Camelot said: "We note that the committee shares our concerns that the Health Lottery appears contrary to both the spirit and the intention of parliament.
"We have always stated that we believe the Health Lottery to be unlawful and a blatant example of an attempt to commercialise a society lottery on an industrial scale in a way that cuts across both the spirit and letter of statute and regulation."