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The real problem with the big lotteries

03/10/2011

There’s been some coverage in the last week around the launch of the new Health Lottery launched by Channel 5 and Daily Express owner Northern and Shell.  The £50m lottery will be drawn and aired on ITV1 on Saturday evenings.  Aside from the obvious fact that this is a competitor to the National Lottery for TV ratings, it raises the question as to whether health charities (and charities in general) will suffer as more competition arrives for the public’s hard-earned cash.

Some believe the second major lottery will be a significant benefit.  Voices, like Northern and Shell owner Richard Desmond believe that economic pressures have meant health issues outside of the NHS offering have struggled to keep going and help people who need it.  He states;

In the current economic climate it is getting harder and harder to raise money for our local health causes.

And I’m sure he’s right to an extent.  From the other side of the fence, Sir Stephen Bubb, Chief Executive of ACEVO, argues that;

It [the Health Lottery] is a disgrace which will undermine the National Lottery’s contribution to charities.

But it’s the figures which underpin the amount of money actually going to good causes which are key to my mind; 20p in every pound for the new Health Lottery and 28p per pound for the National Lottery.  That, I believe is the real disgrace.

Both of these lotteries are heavily marketed based on the good they will do for society and the causes they support.  The organisations deliberately walk a very fine line between for-profit enterprise and philanthropic organisation without every really promoting with equal vigour the fact that the vast majority of ticket sales revenue DOES NOT go to support good causes.

I’m not saying they shouldn’t make a profit, but if these organisations were as committed to supporting good causes as all of their marketing and brand values and launch campaigns and press releases state they are, then a greater proportion of revenue should go to good causes.

Put another way, exactly how inclined would we be to give to a charity that spent 75p in every pound on something other than their cause?

Perhaps I’m being unfair to the lottery organisations.  Perhaps, deep down, the fact that these two lotteries give any money at all to support good causes is just an added bonus.  A bi-product of society’s desire to try and win an absolute fortune every week?

What do you think?

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3 Comments leave one →
  1. Maria permalink
    04/10/2011 2:17 pm

    Hi, good post, but there are a couple of other things to consider. One thing to remember is that in most charity-supporting lotteries, the majority of the non-charity money is used for prize money for winners. People won’t play a lottery unless there are prizes to win – no matter what they might say about wanting to support charities.

    There are also lots of operational costs in running a lottery – including, but not limited to, marketing & advertising, web presence, producing television draw shows, commissions to point of sale retailers, paying spokespeople, legal costs, etc etc. So, you can’t assume that anything not going to charities is going into the lottery’s profit column.

    That being said, it’s true that we should keep our eye on lottery games to make sure that there’s a fair balance of what’s going to charities, what’s going to winners, lottery administrative costs, and profits for the lottery company.

    • 04/10/2011 5:11 pm

      Thanks for your thoughts Maria – I agree on all counts.

      I also spend a lot of time campaigning for charities’ rights to invest some of the funds they raise into operating efficiently, paying the electricity bills and staff wages etc. Profit’s not a bad thing for social enterprise but I think that IF a business is setting out it’s stall as being philanthropic and generating revenue as a direct result, then it should be just as philanthropic in its actions.

      I wonder how many players of the UK lottery realise that only 28% of their money actually goes to good causes, for example?

  2. 04/10/2011 5:59 pm

    It is an interesting issues you highlight. I was always concerned by the level of profit Camelot made from the national lottery and have similar larger reservations about Desmond’s health lottery.

    I always thought the Virgin bid for the national lottery looked more fit for purpose in terms of supporting good causes. Sadly, it may be that the Virgin bid missed out for that reason, the commission thought it was under investing in things like marketing http://www.economist.com/node/461035

    Whether the health lottery takes off remains to be seen, but I will stick with the one that gives most to good causes when I play. If it takes off, will we see a children’s lottery and a famine lottery?

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