National Lottery

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The National Lottery is the state-franchised national lottery in the United Kingdom. It is operated by Camelot Group, to whom the licence was granted in 1994, 2001 and again in 2007. The lottery was initially regulated by the National Lottery Commission, which has since been abolished and its responsibilities transferred to the Gambling Commission, and was established in 1994 by John Major's govt.

All prizes are paid as a lump sum and are tax-free. Of all money spent on National Lottery games, around 53% goes to the prize fund and 25% to "good causes"[2] as set out by Parliament (though some of this is considered by some to be a form of "stealth tax"[3] levied to support the National Lottery Community Fund, a fund constituted to support public spending).[4] 12% goes to the UK Government as lottery duty, 4% to retailers as commission, and a total of 5% to operator Camelot,[2] with 4% to cover operating costs and 1% as profit.[5] Lottery tickets and scratch cards (introduced in 1995) may be bought only by people of at least 16 years of age. Plans by the UK Government to raise the minimum age to 18 are currently in the midst, aiming to ban online purchases to under-18s by April 2021, and in-store purchases to under-18s by October 2021.

Of all the money generated through ticket sales, 53% goes to paying prizes, 25% is allocated to a range of charitable or social causes, 12% is provided to the UK Govt as lottery duty, 4% is allocated as commissions to lottery retailers, and the rest goes to the lottery operator.[1] Initially, the Lottery was regulated by the National Lottery Commission that was converted into the Gambling Commission in 1994.

Background

  • May.1985: Denis VaughanWikipedia-W.svg, an Australian-born composer and a friend of Paul GettyWikipedia-W.svg, was incited by the Heysel Football Stadium disasterWikipedia-W.svg into thinking about how to tackle hooliganism. His answer was a cultural renaissance, driven by an arts-based lottery fund.ref Backed by Getty's money, Vaughan started lobbying the govt. A flurry of articles and papers ensued. However, Margaret Thatcher was implaccably opposed to the idea; she thought there was something obscene about people being rewarded simply because they were lucky.
  • 1988: "Why not gamble on culture?", Sunday Telegraph
  • 1990: "The Case for a National Arts Lottery": the Adam Smith Institute invited Vaughan to write a paper,[2],[3], in which he advanced his pet theory, which linked the causes of violence to rock music. 'More civilised pursuits are needed which enjoy the ubiquity of rock,' he said.
  • Articles were also featured in the House Magazine, The Times, Daily Mail, Daily Telegraph, etc.[1]
  • Vaughan delivered an address to the Confederation of British Industry Sport & Leisure Conference.
  • Oct.1990: The Lottery Promotion Company Ltd was incorporated,OpenCorporates-sm.svg with Denis Vaughan and a whole slew of Conservative MPs as directors. The idea was to provide a central "core" to rally around.
  • Nov.1990: Margaret Thatcher departed.
  • Mar.1991: Kenneth Hargreaves MPWikipedia-W.svg presented an early day motionWikipedia-W.svg in the House of Commons calling for an Arts/Sports Lottery.[2]
  • 1991: Private Members' Bill: Denis Vaughan found a champion for his plan in Ivan LawrenceWikipedia-W.svg, the trenchantly right-wing MP for Burton, who introduced a private members' bill but, although the media and the public overwhelmingly backed the idea, not enough MPs did, and the bill was dropped.[3]
  • 1992: Manifesto Commitment: John Major's creaking administration, desperate to impress the electorate, made the lottery a manifesto commitment,[4] although Major himself wasn't very enthusiastic.
  • Mar.1992: The Govt published a White Paper on its plans to introduce a National Lottery for Good Causes.[5]
  • Oct.1993: The National Lottery etc. Bill received Royal Assent, and passed into law. National Lottery etc. Act 1993
Additional Sources: So how was it for you? Ten years ago the national lottery was launched amid get-rich-quick mania and dire misgivings over its impact on our way of life. The changes wrought by our multi-billion windfall are profound, and go deeper than the headlines. Jamie Doward, The Guardian, Oct.24.2004.

Timelines

National Lottery

The National Lottery was established by Parliament to raise money for worthwhile causes.

The “right of privacy” is imposed by the Secretary of State for Culture, Media and Sport on the National Lottery Commission, which in turn enforces it upon Camelot.

The National Lottery is made up of several different bodies:

  • Camelot operates the National Lottery; it sells the tickets, conducts the draws, handles players’ queries and raises money for the good causes. It is responsible for managing the retailers who have lottery terminals in their shops. Its website lists the draw results. camelotplc.comArchive-org-sm.svg, http://www.camelotgroup.co.uk
  • The Good Causes award lottery funds. Several bodies handle applications for lottery funds and make grants. These distributors provide funds for the Good Causes in the fields of the arts, charities and sport, among others. The lottery's good causes have a combined website providing further information and guidance about how to apply for lottery funds.
  • The Department of Culture, Media and Sport sets the framework for the other bodies by defining their roles, and taking responsibility for drafting the legislation governing the National Lottery.
  • The National Lottery Commission monitor and report on the performance of Camelot (the operator), and to enforce its licence. We also select the operator of the lottery.

The Gambling Commission's role is to monitor and report on the performance of the National Lottery operator (currently Camelot) and to enforce the terms of its §5 licence. It regulates the National Lottery, and selects its operator to ensure, inter alia, that the operator makes the correct payments to the National Lottery Distribution Fund.[6]

Revenues from the Lottery break down as follows:

  • 50% Winners → prize winners
  • 28% Good Causes → the National Lottery Distribution Fund, which passes it on to the 12 distributors of the Good Causes, administered by the Dept for Culture, Media & Sport.
  • 13% Tax → HM Revenue & Customs
  • 5%+1% Retailers → retailers earn commission on all National Lottery tickets sold, and on prizes of £10–£200.
  • 3% Operating Costs → marketing, computer systems, retailer and player support services and administration.
  • 1% Camelot → Camelot's profit.

National Lottery Distribution Fund

Operationally, the NLDF is part of DCMS. Administration of the NLDF is undertaken on a part-time basis by a small number of officials in the department. Management and control of the NLDF is vested in the Secretary of State. National Lottery prizes that remain unclaimed for 180 days after a draw, or closure of a scratchcard game or interactive instant win game, are paid to the NLDF.[6]

Lottery Distributing Bodies

The twelve lottery distributing bodies are:

  • 20% Arts: Arts Council England (13.9%); Creative Scotland (1.8%); Arts Council Wales (1%); Arts Council Northern Ireland (0.6%); British Film Institute (2.7%).
  • 20% Sport: Sport England (12.4%); SportScotland (1.6%); Sport Wales (0.9%); Sport Northern Ireland (0.5%); UK Sport (4.6%);
  • 20% National heritage: National Lottery Heritage Fund (20%)
  • 40% Charitable, health, education, environment: The National Lottery Community Fund (40%)



Until Oct.1997, the Good Causes 28% was shared equally by 5 Good Causes, after which date a 6th came on board.[7][8]

  1. 16.67% Charities: National Lottery Charities Board, an independent body set up by Parliament to distribute a share of the money raised by The National Lottery to support charitable, benevolent and philanthropic organisations throughout the UK. Also makes grants to UK agencies working abroad.ref+pic
  2. 16.67% Heritage: Heritage Lottery Fund.ref
  3. 20% Millennium projects: Millennium Commission was set up as an independent body under the National Lottery etc Act 1993.
  4. 16.67% Arts: Arts Council England; Scottish Arts Council; Arts Council Wales; Arts Council Northern Ireland.ref
  5. 16.67% Sports: English Sports Council; Sports Council Wales; Scottish Sports Council; Sports Council Northern Ireland.ref
  6. 13.34% Health, Education, Environment: New Opportunities Fund: responsible for distributing grants for education, health and environmental initiatives determined by the Govt. Works with national, regional and local partners from the public, private and voluntary sectors to fund UK-wide specified initiatives, with particular focus on the needs of those who are most disadvantages in society. Created by the National Lottery Act 1998. Non-departmental public body of the Dept of Culture Media & Sport.ref

  • On 31st December 2000 the Millennium Commission ceased to exist, and the New Opportunities Fund then received 33.34%.
  • 1996: The National Audit Office found that, a year after the first draw was made, only one of 21 checks recommended by external consultants hired by Oflot was fully up and running, and that was not properly applied. Of the remainder, 10 were only partially introduced and the other 10 were still being drafted. https://www.independent.co.uk/news/mps-to-carpet-oflot-chief-1351606.html

  • Dec.2019: Rebrand: the brand identity, website and app were redesigned in honour of the National Lottery's 25th birthday, this time with an animated crossed fingers logo, and adding the vibrant colours of the draw balls to add fun.[9]
  • Apr.2015: Rebrand: a new brand identity was launched to bring together the connection between winning and National Lottery-funded initiatives.[10]
  •  ??.2014: The Govt most recently amended the National Lottery Act 1993 in 2010 to restore the lottery shares for arts, sports and heritage good causes to 20%, reversing Labour’s cuts.ref
  • Oct.2013: National Lottery Commission became part of the Gambling Commission.[11]
  • Apr.2002: Rebrand: The National Lottery undertook a major rebranding programme to combat falling sales, with the launch of a £3.2m advertising campaign. Saatchi & Saatchi's original crossed-fingers logo was modified, with the text in a curved format underneath the icon.[12]
  • Apr.1999: The National Lottery Commission was established as a non-departmental public body under the National Lottery Act 1998, to replace OfLot.[11][13] The Commission grants and enforces licences to run the National Lottery, and aims to ensure that the Lottery is run and promoted with all due propriety; that players' interests are protected; and that, subject to these, the most money is raised for good causes. The National Lottery Commission is an Executive Non-Departmental Public Body, sponsored by the Department for Culture, Media and Sport (DCMS) and its work is funded by the National Lottery Distribution Fund (NLDF). ToDo: natlotcomm.gov.ukArchive-org-sm.svg; logo in file; Timeline; About;
  • late.1998: National-Lottery.co.uk: The National Lottery website was launched. national-lottery.co.ukArchive-org-sm.svg
  • Jul.1994: Branding: Saatchi & Saatchi won the contract, creating the launch commercial featuring “The Hand of Good Fortune”. The now-famous crossed-fingers logo, delivering the idea of “It Could Be You”, had an astonishing 95% retention rate.[14]
  • May.1994: Camelot Group plc, a consortium of Japan's International Computers Ltd (Fujitsu), France's Racal Electronics plc (Thales SA), Cadbury Schweppes, De La Rue plc, Italy's GTech Corporation and Royal Mail Group plc, was selected to run the first UK National Lottery.
  • Oct.1993: OfLot, the Office of the National Lottery, was established to oversee the National Lottery's administration, and to license bodies to run the National Lottery.[15]natlotcomm.gov.ukArchive-org-sm.svg
  • 1993: National Lottery: the UK's state-franchised lottery was set up under govt licence by John Major as a personal initiative,[16] with the first draw taking place on Nov.19.1994.ref

The National Lottery is franchised to a private operator; Camelot Group plc was awarded the franchise in May.1994.[8]

  • Apr.1999: National Lottery Commission: non-departmental public body, regulates the National Lottery, a task formerly carried out by the Office of the National Lottery (OfLot). The Commission was set up under the National Lottery Act 1998. Dept of Culture, Media and Sport. infos
  • WP: The National Lottery is regulated by the Gambling Commission.ref Previous regulators were the Office of the National Lottery (OfLot) until Apr.1999, and the National Lottery Commission – a non-departmental public body reporting to the Department of Culture, Media and Sport – until Oct.2013.

Big Lottery Fund

Big Lottery FundWikipedia-W.svg BigLotteryFund.org.uk, Gov.uk

Lottery Legislation

Over the centuries, the English Govt has devoted an enormous amount of time and energy attempting to forbid, ban, regulate and otherwise limit lotteries in which the general public participated. This behaviour is made the more egregious by the fact that the The Royal Exchange – the largest gambling centre of all time – was opened in 1571 by Elizabeth I.[17] [18] Clearly, the elite may gamble to their hearts' content, but not citizens.

  • 2006: National Lottery Act 2006: established the the Big Lottery Fund, the National Lottery Commission; provided for the dissolution of the National Lottery Charities Board, the Millennium Commission, and the New Opportunities Fund.
  • 2005: Gambling Act 2005: established the Gambling Commission, tr the functions of the Gaming Board to it; and repealed in their entirety: the Lotteries Act 1710, Gaming Act 1710, Gaming Act 1738, Gaming Act 1835, Gaming Act 1845, Gaming Act 1892, Betting, Gaming and Lotteries Act 1963, Gaming Act 1968, Gaming (Amendment) Act 1973, Lotteries Act 1975, Lotteries & Amusements Act 1976, Gaming (Amendment) Act 1980, Gaming (Amendment) Act 1982, Lotteries (Amendment) Act 1984, Betting, Gaming & Lotteries (Amendment) Act 1984, Betting, Gaming and Lotteries (Amendment) Act 1985, Gaming (Bingo) Act 1985, Gaming (Amendment) Act 1986, Gaming (Amendment) Act 1987, Gaming (Amendment) Act 1990, Bingo Act 1992, plus various bits of numerous other Acts.
  • 2004: The Horserace Betting & Olympic Lottery Act 2004.
  • 1998: National Lottery Act 1998: established the National Lottery Commission, which replaced the Office of the National Lottery (OfLot); and established the National Endowment for Science, Technology & the Arts, to be endowed out of the National Lottery Distribution Fund.
  • 1993: National Lottery etc. Act 1993: established the National Lottery; also established the National Lottery Distribution Fund (NLDF) to receive and hold National Lottery monies for the Good Causes. The NLDF is managed and run by staff employed by the Dept for Digital, Culture, Media & Sport, as per §21 of the National Lottery etc. Act 1993.[6] The Lottery monies are independent of govt, and are distributed by the 12 independent lottery distributing bodies.
  • 1988: A National Health Service Lottery was piloted but cancelled for legal reasons before the first draw. See National Health Service LotteryWikipedia-W.svg
  • 1976: Even more liberalisation re lotteries.
  • 1968: The Lotteries Act 1968 superseded the Lotteries Act 1710. It came at a time when illegal gambling in the UK was reaching its peak. The Royal Commission of Betting considered the gaming and lottery regulations to be too complicated to be effective, and recommended the drafting of new laws that would outlaw gaming whenever chances were unequal. The new law was based entirely on the concept of licensing and registration so that lotteries and betting could occur. A Gaming Board was to be set up to enforce the new regulations and for providing registration to all parties interested in setting up such opportunities.
  • 1963: Betting, Gaming & Lotteries Act 1963.
  • Sept.1960: The Betting and Gaming Act 1960 paved the way for legalised betting shops, bingo halls and casinos. The govt hoped that it would take illegal gambling off the streets, allowing punters to walk into local shops to legally place their bets. The Act legalised not just betting shops but also gaming machines in pubs. Bingo halls and casinos were also made legal – as long as they were members-only establishments and took their money from membership fees and charges.ref
  • 1956: further liberalisation re lotteries.
  • 1951: The Royal Commission on Betting, Lotteries & Gaming deemed gambling to be a “relatively harmless issue” and recommended that off-course betting should be legalised – not least because it would raise money for the govt.ref
  • 1934: The Betting and Lotteries Act 1934 explicitly prohibited all lotteries, with the exception of small lotteries held by, for example, bazaars, sales of work, and fetes; but money prizes were forbidden. Also allowed were private lotteries held by clubs or societies.
  • 1928: The Racecourse Betting Act 1928.
  • 1898: The Revenue Act 1898.
  • 1854: The Lotteries Act 1845.
  • 1836: The Lotteries Act 1836.
  • 1831: The Lottery Office was abolished, and its residual work, mostly regarding unclaimed prizes, transferred to the Board of Stamps (later, the Board of Stamps & Taxes).
  • Oct.1826: State lotteries came to an end, having fallen into increasing disrepute due to numerous malpractices, including illegal insurance and wagering on results.[19]
  • 1823: The Lotteries Act 1823.
  • 1806: The Lotteries Act 1806.
  • 1802: The Gaming Act 1802.
  • 1774: Acts were passed with increasing frequency to permit private lotteries, whose drawing was often combined with that of the state lotteries. The Lottery Office exercised control over private and state lotteries.[11]
  • 1738: Gaming Act 1738: consolidated the various preceding Acts.
  • 1732: The Lotteries Act 1732.
  • 1722: The Lotteries Act 1722. Sections 4+5.
  • 1721: The Lotteries Act 1721.
  • 1710: The Lotteries Act 1710 was passed, reinforcing the prohibition of the 1698 Act. It was felt that Britain was a “nation addicted to gaming”. At the time, there were numerous opportunities for a player to lose an entire fortune overnight. The Act set a maximum allowable gaming debt of £10 pounds; any gaming debt exceeding this was not legally enforceable. Unfortunately, the Act was completely ineffective. Fortunes changed hands so frequently that the media declared that wealthy men were now made on the betting table.[20]
  • 1709-1824: The Govt annually raised considerable sums in lotteries authorised by Acts of Parliament. The prizes were in the form of terminable or perpetual annuities. (Encylc. Brit.)
  • 1698: An Act for suppressing of Lotteries was passed, providing that all lotteries were illegal, unless specifically authorised by statute.[21]
  • 1694-1776: The Million Lottery, the first state lottery, was launched in 1694. It formed a pattern for a further 42 Parliament-authorised lotteries, to swell the Govt's coffers.[20]
  • 1567: The Royal Lottery of 1567-1568 took place. The principal aim was to raise money for the repair of the Cinque Ports,[22] as well as other public works, but it was not a success. The Royal Lottery is the first lottery in England of which any record survives, but it is highly likely that undocumented lotteries had been held beforehand.[23]

References

  1. ^ Memorandum submitted by the Council for Advancement of Arts, Recreation and Education (CAARE). Select Committee on Culture, Media and Sport, Parliament.uk, Mar.25.2004.
  2. ^ National Lottery. EDM 566, Parliament.uk, Mar.05.1991.
  3. ^ National Lottery Bill, Second Reading. Orders of the Day, They Work For You, Jan.17.1992.
  4. ^ The Best Future for Britain. We therefore propose to introduce a National Lottery from 1994, which would help provide funds for a number of good causes in the artistic, sporting, heritage and charitable fields. Conservative Party Manifesto 1992, ConservativeManifesto.com, 1992.
  5. ^ National Lottery. The House of Commons, They Work For You, Mar.06.1992.
  6. ^ a b c Annual report and accounts for the year ended 31 March 2020. National Lottery Distribution Fund, Gov.uk, Jul.17.2020.
  7. ^ Who we are. National Lottery Charities Board. Original archived on Jun.05.2000.
  8. ^ Good Causes. National Lottery. Original archived on Feb.244.1999.
  9. ^ KR rebrands The National Lottery to restore its “sense of joyful purpose”. Jenny Brewer, It's Nice That, Dec.04.2019.
  10. ^ National Lottery to launch ‘new brand identity’ following ‘record year’ of sales. Alison Millington, Marketing Week, Apr.14.2015.
  11. ^ a b c Records of the Office of the National Lottery and successors. National Archives. Accessed Dec.16.2020.
  12. ^ National Lottery points to Landor. Design Week, Apr.11.2002. Original archived on Jan.01.2014.
  13. ^ Timeline: the National Lottery. Press Association, The Guardian, Aug.07.2007.
  14. ^ Launching a brand: Advalue: The National Lottery. Marketing Week, Jun.28.1996.
  15. ^ About Us. National Lottery Commission. Original archived on Apr.07.2000.
  16. ^ History and Tour: John Major. No.10, 2011. Original archived on Aug.05.2011.
  17. ^ The Royal Exchange. Walk London. Original archived on Mar.03.2017.
  18. ^ Heritage. The Royal Exchange. Accessed Dec.16.2020.
  19. ^ "The Abolition of the English State Lotteries", James Raven, Cambridge University Press, Jun.1991.
  20. ^ a b 18th Century Lottery. Sarah Murden, All Things Georgian, Jul.26.2016.
  21. ^ "An Act for suppressing of Lotteries.", William III, 3rd ParliamentWikipedia-W.svg, Statutes of the Realm: Vol.7, 1695-1701, ed. John Raithby (s.l, 1820), pp.532-533, 1698.
  22. ^ "The Development of the UK National Lottery: 1992-96", Peter G Moore, Wiley, 1997.
  23. ^ Lottery Office records. National Archives. Accessed Dec.16.2020.