Gambling Bill "offers unexpected windfall for charities"
Howard Lake | 5 November 2004 | News
External lottery management company Million-2-1 claim that charities stand to benefit from a clause in the controversial Gambling Bill which will incentivise soon-to-be illegal prize competitions to switch to lottery status.
Million-2-1 say that the Gambling Bill will clamp down on what it says are effectively fake lotteries and charities will benefit. It will redefine the boundaries between charitable lotteries and commercial prize competitions, to the benefit of charities.
The company explains that thousands of simple quiz competitions, used throughout magazines, television, online and through direct mail, will be illegal once the if the Gambling Bill is passed. Media and brand owners, who generate significant revenue by asking consumers to respond to simple questions via premium-rate SMS or telephone numbers, will no longer be permitted to run them, as they are effectively lotteries.
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Instead of stopping them, many are expected to use the opportunity to convert the promotions to full lottery status, “and will therefore have to donate 20% of SMS or call revenues to good causes.”
The legislation will affect those operators that use a process which neither:
“a) prevents a significant proportion of persons who participate… from receiving the prize, nor b) prevents a significant proportion of persons who wish to participate… from doing so.”
Promotions and games which use a question, and charge a premium rate for response, will therefore be regarded as illegal lotteries once the new legislation is in force.
Million-2-1 say that such promoters face three choices. They can make their competitions free to enter, make the questions or other skill-mechanisms much harder, or recast their promotions as lotteries.
CEO of external lottery manager Million-2-1, Chris Sheffield expects many brand and media owners to choose the lottery route. Hs said: “faced with a choice between losing all their revenue, losing a significant proportion of potential customers, or donating 20% to good causes, most organisations would see the value of taking the responsible approach and working with an external lottery manager to design new forms of promotion for the benefit of consumers.”
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.