Lottery Good Causes vs. Ticket Cost – How Much Is Enough?

The recent furore in the press regarding the changes to the UK Lotto has led to a number of discussions in the last few days about the distribution of lottery funds, not least the amount which should go to jackpot winners. However, it has been quietly confirmed that the percentage per pound going to Good Causes is expected to drop slightly with the changes, although the UK Lotto have claimed the increased revenue generated will ensure bigger donations can be made. In a surprise turn, the Health Lottery has waded into the debate, and has suggested they think the amount given the Good Causes should actually be reduced. Do you agree?

Whilst the percentage return from the UK Lotto after the changes is expected to reduce by up to 2%, it should be noted that Camelot give an average of 30% to good causes – way above the legislated 20% required by the Government, and currently provided by the Health Lottery. However, the UK Lotto’s official Good Causes figure is 28%, with 30 – 32% often achieved. They have suggested that although they may no longer reach 32% donations, they will not drop below 28%.

The UK Lotto…

The UK Lotto are committed to providing the maximum revenue possible for nationwide causes, and raise an average of £30 million per week through lottery, scratchcards and online sales. They contributed a total of £2.2 billion towards the Olympic Games, and have distributed over £29 billion across 13 national bodies, which include the Arts Council of England, Wales and Northern Ireland, the British Film Institute, UK Sport and the Big Lottery Fund since the lottery began. Indeed, between March and September 2012 alone, they raised a whopping £952.8 million in Good Causes funds*. With the proposed changes, they hope to raise more revenue and thus generate more funds.

vs… The Health Lottery

The Health Lottery, on the other hand, have proposed that the 20% implemented by the Department of Media and Sport should be reduced to 15%, as the amount required has made it difficult for the new lottery to establish themselves. Health Lottery CEO, Dominic Mansour has been quoted as saying that if the 20% was reduced to 15%, they could use the extra funds to help the lottery grow ticket sales, which in turn, would help increase revenue.

The Health Lottery raises money for its 51 localised health related charities around Britain. Since the introduction of the Health Lottery in September 2011, they have raised to date £24 million for their causes**, which equates to roughly £1.5 million per month (approximately £364,153 per week), and an average of £470,588 per charity to date. If they succeeded in achieving the 15% reduction, based on current sales this would see the same figures reduced by £6,000,000, generating an average of £1,125,000 per month and £352,941 per charity. You can read about the Health Lottery on National-Lottery.com.

Is £1 Too Little?

The Health Lottery’s proposal indicates that the current lottery ticket price of £1 is simply not viable in the current financial market – which would explain why the UK Lotto is increasing their price. Whilst no-one wants to see a reduction of money given to Good Causes, nor a reduction to the amount on offer for players to win, maybe the answer is simply that the current ticket price does not provide enough revenue for all the requirements of a lottery. By opting for a reduction in the amount they can to pay to the Good Causes fund in order to continue their expansion, are the Health Lottery just trying to rob Peter to pay Paul?

Could the Health Lottery’s promise not to increase ticket price be short sighted and prevent their growth? Will they have to claw back desperately needed operating funds from another area – whether it be good casues or prize funds? Or will players opt to play the Health Lottery because it is still only £1, leading to an organic increase in revenue? Will the UK Lotto’s plan backfire spectacularly?

* Figures from the Civil Society Website

** Figures from the People’s Health Trust website