By Steve Mills, Compliance & Client Relationship Manager
Society Lotteries in the UK are continuing to set new records. Total sales from such lotteries reached £255m in 2017, which was an increase of over £43m on the previous year. The reward for those charities and societies who enjoy successful lotteries is certainty of income, which enables them to plan ahead with confidence.
On 20th March 1993, I entered the world of lotteries at the age of 25, joining the Manchester United Development Association (MUDA). It was a world with no National Lottery, society lotteries were regulated by the Gaming Board of Great Britain, John Major was Prime Minister and the England football team were managed by Graham Taylor.
With no previous experience of lotteries, it was a steep learning curve as one quickly grasped that the industry I had joined was heavily regulated, and compliance with the 1976 Lotteries and Amusements Act was vital. I knew then that I would have to learn quickly and working with an experienced team was of enormous benefit in those early days.
The following year, the National Lottery was introduced which felt like a metaphorical earthquake. Members who had been paying a pound into our weekly lottery for many years were instantly seduced by the chance of winning life-changing prizes, although many remained loyal to their local clubs, due to the efforts of the fantastic network of agents.
Introducing a new half-time draw in 1995 helped to supplement income and raised the profile by taking place on the centre circle; profile that remains important in maintaining successful lotteries today.
The introduction of National Lottery Scratchcards increased the pressure but Society Lotteries soldiered on by being positive and reaching out to their loyal supporters.
THE WIND OF CHANGE
As the new century began, two new challenges faced the lottery sector.
The new Labour government was committed to expanding what was to become known as the ‘Third Sector’, with more charities taking on new projects that in the past may have been publicly funded. This led to an increase in the number of charities, and many decided to operate lotteries for funding their core projects. Competition therefore increased.
Also, at this time, there was political pressure to modernise gambling legislation, in order to expand the casino and betting sectors. In order for this to be done without significant negative social effects, it was therefore necessary to ensure that gambling was conducted openly and fairly, in a socially responsible manner, and kept criminal activity out of the sector.
An exhaustive legislative process resulted in the Gambling Act 2005, which was fully implemented in September 2007.
THE GAMBLING COMMISSION
A new Gambling Commission would regulate the sector, including lotteries, ensuring compliance with the 2005 Act and was tasked with keeping gambling free of criminal, fraudulent and socially irresponsible activity.
Those who had a good working knowledge of the 1976 Act had to adjust to a whole new legal and regulatory framework, and a newly formed team based in Birmingham began its job of ensuring compliance.
During this period, I had moved from football to rugby league, joining St Helens Rugby League Club, and developed a positive working relationship with the new Gambling Commission. Compliance visits were constructive and a good opportunity to share best practice and ensure that we were all working towards the key licensing objectives.
FROM SPORT TO CHARITIES
In 2014, my own perspective was about to undergo radical change, as I joined Tower, entering the world of charity lotteries, and specifically air ambulance lotteries.
Tower manages seven lotteries as an External Lottery Manager (ELM) and provides canvassing services to most of the other air ambulance charities based in mainland Britain.
The change was extremely profound. I had left a world predominantly cash-based, dependent upon supporters collecting stake money and being rewarded with match tickets, where the big cash prize was the main reason for supporting, and where the fortunes of the team on the pitch had such an impact on the lotteries.
I had now entered a new world where people almost universally paid through their bank by direct debit, where the lottery stake was effectively considered as a donation and many prizes were actually paid back to the charity in whole or in part, and where support for the regional air ambulances was absolutely fantastic.
The lotteries were already large, and continuing to grow, and some were even looking ahead to the days when they would hit their £10m gross sales limit.
Continuing success seemed inevitable, as Society Lotteries as a whole continued to grow.
A NEW FUTURE FOR FUNDRAISING
Then in May 2015, the world of charity fundraising was to change forever.
The tragic suicide of Olive Cooke in 2015, who had received multiple charitable mailings over a significant period, resulted in a huge media campaign. They focused on some high-profile cases where a small number of individuals and fundraising charities, along with third party service providers, had behaved extremely badly.
This campaign resulted in political pressure from the heart of government, with suggestions being made that it was time for statutory regulation to replace the current system of self-regulation.
Rob Wilson, the Charities Minister at the time, insisted that a new regulatory framework was required, and entrusted Sir Stuart Etherington, to produce a report to examine the options available.
This report resulted in the creation of the new Fundraising Regulator, which would take responsibility from the Institute of Fundraising (IOF) and Public Fundraising Regulatory Association (PFRA) for enforcing the Code of Fundraising Practice and its associated rulebooks.
It was to be self-funded by levies on charities.
Whilst not being compulsory to register, it was suggested that high levels of non-registration would probably result in a statutory obligation to do so. In the end, most large charities did register, and third-party fundraising organisations are now able to do so if they wish.
Charities were now under huge pressure to not just meet their fundraising targets but to ensure that they were doing so in a socially responsible way.
Never had it been so important to ensure that all lottery fundraising was being conducted ethically.
It was therefore vital that all charity staff, and partner organisations like Tower, were acting in full compliance with the Code of Fundraising Practice. Working with the right partners was now critical for the effective governance of a charity.
Those operating lotteries now effectively had two regulators, the Gambling Commission and the Fundraising Regulator.
Tower worked closely with its charity partners, as it had always done, to ensure that it was fulfilling all of its contractual, ethical, legal and regulatory obligations.
By early 2017, charities had largely restored their place in the hearts of their supporters, and in the case of air ambulance lotteries, continued to grow.
GDPR – THE CHALLENGES OF COLLECTING AND MANAGING LOTTERY DATA
However, a new potential challenge was already appearing on the radar of every charity in Britain.
The General Data Protection Regulation (GDPR) was passed by the EU in 2016, and therefore became law in the UK, with the full implementation date set for May 2018.
Apocalyptic warnings of not being able to contact current supporters led some charities to undertake huge campaigns to renew consent.
However, as consultations continued between the ICO and charities, more reassurance gradually emerged that GDPR was not going to be the end of supporter contact.
What did become clear was that individuals had to be given specific information as to how their personal data was to be used and ensuring that they were empowered to change those contact preferences whenever they wished.
Discussions ensued as to when ‘consent’ or ‘legitimate interest’ was to be used, and charities were encouraged to document their reasons as to which legal means they had chosen for processing data.
As with all other legal and regulatory change, Tower has been working closely with its partner charities to ensure that we are correctly processing the data of all new and existing lottery members in line with the agreed instruction from those charities.
It was now imperative that careful thought was given when designing lottery sign up forms and ensuring that future use of lottery data was being carefully considered at the time.
THE WORLD OF LOTTERIES IN 2018
So how does the world of lotteries look in 2018, compared to 1993?
Charities now account for the overwhelming majority of society lottery sales in the UK, although many sports clubs still operate successful lotteries, and these maintain vibrancy and diversity in the sector.
Lotteries are now more extensively regulated than ever. However, that regulation ensures that only responsible operators can continue to run them and maintains public confidence which is crucial to continuing growth of those lotteries.
A quarter of a century after entering the world of Lotteries, it is enormously satisfying to reflect on the wonderful teams and projects I have worked with, and how exciting the future now looks working with a team of dedicated professionals at Tower, and so many wonderful air ambulance charities.