A government-commissioned report on the impact of a potential change to lottery ticket sales has revealed a disproportionate UK landscape.
The paper was prepared by market analysis group WPI Economics for the UK’s Department for Culture, Media and Sport (DCMS).
With current lottery ticket sales limited to £50m per year, WPI set out to investigate how either an increase to £100m or a complete removal of that ceiling would affect the UK’s National Lottery (NL), society lotteries, and charity funding.
WPI leveraged existing evidence on how lotteries are currently functioning alongside consumer choice data. Additionally, the group conducted proprietary qualitative research through stakeholder interviews together with quantitative analysis through consumer and charity sector surveys, which shaped the final conclusion.
Across a total of three scenarios, ticket sales for the People’s Postcode Lottery (PPL) – the largest society lottery – and all lotteries operating under its brand were positively impacted by a theoretical increase of the limit.
PPL ticket sales are estimated to grow between £51m and £447m, increasing its share of the society lotteries market from 61.8% to between 63.6% and 73.9%.
Looking at the National Lottery, WPI expects negative impacts. While the NL retains its market dominance with more than 80% market share across all three scenarios, the group predicted ticket sales would decrease by between £25m and £148m if the limit is increased to £100m.
Similar effects are expected across both lotteries if the limit is removed altogether, but with two major distinctions.
WPI suggests that in PPL’s case, this would remove the need for the society lottery to manage multiple licences, leading to a reduction in operation costs and a potential for increased contributions to charities.
For the NL, removing the annual ticket sales limit would mean that it will no longer be under a protected status from the government. Additionally, there would be nothing stopping society lotteries from overtaking NL sales until the NL can no longer sustain the level of its prizes – a key factor for National Lottery players.
In terms of funding for good causes, the research highlighted that NL contributions could decrease by between £5m and £30m, while contributions from the PPL are expected to grow by between £17m and £157m. Overall, this would represent a net increase in good causes funding by between 0.8% and 6.5%.
However, this would also mean a shift in the composition of funding due to how grants are managed by the two lotteries.
While PPL money goes into charities for them to use as they see fit, NL provides a more structured funding, allocated for specific projects and causes ranging from health and education to sports and arts.