Is Lottery funding being undermined?
Media magnate Richard Desmond, owner of the Express and Star and Television X has other ambitions these days – he runs his own lottery called the Health Lottery.
It is big business: there were strong rumours last month that he was intending to sell it for more than £100 million with suitors including Cardiff City FC’s eccentric owner Vincent Tan and Playtech, an Israeli gambling software group. That would represent a pretty good return for Desmond on a business he only set up a couple of years ago.
Part of the appeal for a potential purchaser is that the business would be in a good position to challenge Camelot when the National Lottery contract comes up for renewal – and in the meantime there are profits to be had.
The Health Lottery is one of two organisations that have found a way to challenge the National Lottery’s monopoly on UK lottery schemes.
Desmond’s organisation can offer national prizes because it is not a single organisation but an amalgamation of 52 separate and smaller schemes set up across England and Wales.
And whilst prize money is smaller because these “umbrella” lotteries are characterised as “society lotteries” they only have to put back 20% of their proceeds into good causes as opposed to the 26% paid out by the National Lottery and they are exempt from the 12% duty that the National Lottery has to pay.
The Health Lottery runs on similar lines to the National Lottery and is widely promoted through Desmond’s media empire which includes the Express and Star newspapers and Channel 5.
To date the it has raised more than £50 million for good causes, which is all very welcome to the recipients. However it has not been all plain sailing: last year an advert for it was banned by the Advertising Standards Authority on the grounds that it encouraged ”irresponsible and potentially harmful gambling."
Now the government at Westminster has started a consultation process on the future of these lottery schemes. In some respects it is a finely balanced argument.
Proponents of the Health Lottery and others argue that their work increases the total investment in charities in England and Wales. However recipients of National Lottery money argue that the monopoly currently in force is effectively being undermined and drops in market share for it will lead to a fall off in its investment. Regardless of the pros and cons in England and Wales that is a pretty much unanswerable argument for Northern Ireland because monies lost by the National Lottery in England will impact funding here.
But there is more. As Scope has already highlighted, Big Lottery in Northern Ireland is prioritising the most vulnerable in society in its next phase of activity. It also gives out an awful lot of money in small tranches to community groups.
These grants are vital and have proved transformational but they are not necessarily sexy, nor do many of the groups involved have the marketing clout and brand identity of bigger charities. De-regulating the lottery will inevitably lead to a populist approach amongst the private lottery providers.
We see that already in the case of the Postcodes Lottery which gives a lot of its funding to animal welfare charities, for example.
That’s not a bad thing, but at Scope we believe that communities should be supported on the basis of need not on the popularity of the particular good cause charities are devoted to. Such a development can only lead to less investment in the people who need it most.
Details on the consultation and how to respond are here.
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