Charities would be able to raise more money for good causes and the National Lottery should not be affected negatively if the regulation of society lotteries was reduced, according to a new report commissioned by the People’s Postcode Lottery.
The report, published by the Centre for Economics and Business Research, says there is significant potential for the PPL to expand the contributions it makes to good causes to as much as £130m a year – an increase of £120m – if regulations governing revenue and prize sizes are relaxed.
The rules, which are being reviewed as part of an inquiry by the Commons Culture, Media and Sport Committee, say that society lotteries must not sell more than £10m of lottery tickets in any calendar year and may not offer prizes worth more than £25,000 or, in the case of large society lotteries, 10 per cent of gross ticket sales.
The report says that contributions to charity are far higher in other countries where postcode lotteries are run, such as Sweden and the Netherlands, despite their smaller populations. Based on a review of the academic literature and evidence from other countries, the report says the National Lottery stands to benefit from the complementary nature of a larger society lottery sector.
It says that 90 per cent of the trusts on behalf of which PPL operates society lotteries cited the £10m cap on charity lottery revenues and the £4m limit on individual draws as the regulations they would most like to see relaxed.
"Under a high deregulation scenario, the contribution of players of the People’s Postcode Lottery could increase annual contributions to good causes from a current level of £10.2m to as much as £130.2m purely as a result of the growth opportunities offered by a more favourable regulatory approach," says the report. "A stronger society lotteries sector, more able to capitalise on economies of scale and able to continue its current growth, is expected to generate increased funding for good causes and ultimately at near-zero cost to public finances."
Mark Astarita, fundraising director of the British Red Cross, said in a statement: "Excessively tight restrictions can put charities off running lotteries and this limits the funds they have available to spend on their work. Players of the People’s Postcode Lottery help charities such as the British Red Cross to do more to support people in crisis, and simple reforms could enable the available pot of money to grow."
Peter Lewis, chief executive of the Institute of Fundraising, said: "This report highlights the importance society lotteries have in the fundraising community. Simplifying existing regulations will allow even more to be raised by charities, delivering increased support to good causes at a time when they need this most."