Government launches shake-up of the Lottery

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Jane Taylor reports on two consultation exercises that will shape the future of the game and who benefits from funding

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After a late hitch, the Government has launched its Review of Lottery Funding, a month after it released the companion
Review of Lottery Licensing and Regulation. Neither document contains any big surprises, but both invite views on radical change as well as enhancements to the current system.

In reality, while changes in licensing structure and regulation will probably form part of a gambling bill, expected in the 2003-04 parliamentary session, it is unlikely that major legislative changes will happen on the funding and distribution side, because of lack of a suitable legislative slot.

The funding review was to have been launched at Lottery Monitor’s sixth annual conference on July 3, but was postponed until this week after Tessa Jowell, the Culture Secretary, fell ill. The funding review fleshes out the wide range of issues raised by the Culture Secretary in her ‘Southwark speech’ in early April. As expected, it contains few specific proposals, but asks lots of questions, such as: should there be a single distributor; is additionality still relevant; should we have an annual National Lottery day; at what local level should funds be targeted; should there be local referenda on distribution issues and so on.

The funding review also picks up the proposal aired for the first time at Lottery Monitor’s annual conference by Camelot, for a new body to raise public awareness of good causes (see story, right).

The central issue in the separate review into licensing and regulation is how to ensure competition within the ‘natural monopoly’ that is the National Lottery. The licensing review has been in the pipeline for nearly 18 months, in the wake of the farce that overtook the franchise bidding process in 2000. Six weeks before the Government published its review, the National Audit Office had warned of ‘a real risk that there will be no competitive pressure when the next licence comes to be awarded’. While there were eight bidders for the first Lottery licence, for the 2000 competition this went down to two.

The review paper lists various changes that could sharpen competition within the existing regulatory framework and four alternative structural approaches that would require new legislation.

Camelot is likely to be unhappy about any proposals that split the ‘infrastructure’ functions (technology, terminals, etc) from the provision of Lottery games. A spokesperson said: ‘Any changes must be judged against how well they ensure integrity, efficiency and security.’ The current regulator, the National Lottery Commission, is said to be pleased that the review document has come out in favour of keeping a Lottery regulator separate from the general regulation of gaming which will fall under the ambit of a new Gambling Commission in a couple of years’ time.