Posts Tagged ‘Lottery’

Charity Lottery ‘and the Winners are for Profit’

Charities across many sectors must think they have won the lottery!  From Oxfam to the Royal Mencap Society, Fire Fighters to Sue Ryder there are a burgeoning number of number of ‘lottery schemes’ to redistribute your wealth. The Gambling Commission records 520 licensed lotteries that range from big bookies to bigger charities.

The  for Profit Sector

Google ads for these schemes rake in money for guess who? You got it, Google! TV ads are becoming more frequent for example back to back ITV 3 adverts for the  Cats Protection lottery and the RNIB must have cost a few months prize money. ‘Your Charity Lottery’  works in conjunction with Dove House Hospice Ltd   509551 – and says it offers other charities and fundraising groups the opportunity to add a weekly draw to their fundraising portfolio’.

Set up and management costs for these schemes must have been calculated to be cheaper than other fund raising activities, or more likely it is just one more money raising method. Private commpaies have latched on to the opportunity for their business eg. ‘ Zaffo can manage lotteries, raffles, prize draws, free prize draws, instant win games’…….. ‘ Woods is already leading the market. We act as an external Lottery manager, providing clients with a comprehensive charity lottery service ……….’  ‘Clubdraw is designed to give good causes large and small – from village playground fund to international club – the chance to gain support and raise valuable funds through their own weekly lottery draw ………’ Other similar organisations are available.

The Gambling Commission

A lottery is a kind of gambling which has three essential ingredients:
■You have to pay to enter the game
■There is always at least one prize
■Prizes are awarded purely on chance

Types of lottery under the Gambling Act 2005 are classified as

Small society lotteries The society in question must be set up for non-commercial purposes eg sports, cultural or charitable. There is a top limit of £20,000 in ticket sales.

Large society lotteries Similar to the small society lottery, but there is a minimum of £20,000 in ticket sales and more onerous controls.

Local authority lotteries to help with any expenditure it normally incurs. They must hold a Gambling Commission licence.

The following types of lottery do not require permission.

  • Private society lotteries must raise money for the purposes for which the society is conducted or to raise funds to support a charity or good cause. No rollovers.
  • Work lotteries for colleagues who work at the same single set of premises/people who live on the same single set of premises. No rollovers. make no profit or be to raise funds for a charity or good cause.
  • Customer lotteries can only be run by a business, at its own premises and for its own customers. No prize can be more than £50 in value. This type of lottery cannot make a profit, and so is unsuitable for fundraising. No rollovers.
  • Incidental lotteries  can be held at commercial events (such as exhibitions) or non-commercial events (such as school fetes) and must be for charitable or other good causes. They cannot be run for private or commercial gain.

Concerns

  • Is enough of the donor/player cash returned to the good or charitable cause.
  • Both the Gambling and Charity commissions have supervision roles and need to be coordinated to prevent abuse.
  • Gambling is a potential problem for those less able to manage their finances. Our local Credit Union (set up to to help borrowers) is happy to promote its regular lottery and annual raffle.

Unity Lotto is a bit of a Gamble

I recently referred to Unity Lottery when discussing Pets at Home’s pet charity ‘Support Adoption for Pets’. During research I was taken by the strong assertions by Unity Lottery that they had no connection to Unity Lotto. That set me wondering what was going on.

Unity Lotto

Unity Lotto operate a lottery syndicate, rather than a lottery so they maintain they are not required to be regulated or authorised by the Gambling Commission. If you are one of the many who have a complaint they suggest in the T’s&C’s ‘For more information, please visit the Gambling Commission Website. (Not much use if they are unregulated).  We are not required to be regulated by the Financial Services Authority, as the syndicate we operate is not an investment scheme.’

As far as we can ascertain Unity Lotto is not connected with Camelot Group PLC, any charitable good works or any other lottery providers nor is it in receipt of commissions.

UnityLotto EuroMillions syndicated service  enables members to play the lottery together by buying a number of tickets at a shared cost and splitting any prizes won.

This is a sample costing and reward calculation: assume ‘150 syndicate members pay £37 each for 4 weeks of 150 tickets a week. Total income £5,550 Money spent on tickets = £1,200.
Profits before costs for Unity Lotto £4350.
Not actually illegal and pretty much on a par with every scam online syndicate I have seen – most of them also offer existing members incentives to drag more victims in.
Good luck trying to get anything back and avoid online syndicates in the future.’ (Money Saving Expert forum).

Most of the complaints we have seen are based on recruitment of new members, taking money without clarity or due authority, misleading phone calls purporting to be from the National Pension Service and disappearing without responding to problems.

Unity Lottery

The Unity Lottery is a ‘common brand lottery jointly promoted with individual society lotteries. Each Lottery operated under Unity (part of Sterling Lotteries) is a separate licensed lottery, operated by and supporting that particular good cause.’ It is registered with the Gambling Commission.

Members sign-up to pay £1 per week for a unique six-digit lottery number. Numbers are entered into a weekly draw, with various prizes including a £25,000 jackpot. For every £1  received  50p will go directly to your chosen charity or cause. (50%) The rest covers prizes, profits and administration costs.

According to their parent organisation web site ‘in 2014, Sterling enabled over 250 organisations to raise a total of almost £45 million through fundraising lotteries. Their lottery members shared over £7.5 million in prizes.’ That looks like £45m less £7.5m prizes leaving about £27.5m for running costs and profits.

Comment

Neither of these organisations is a charity. Unity Lotto  needs to be supped with a very long spoon if at all.

Unity Lottery raises lots of money for lots of good causes from the supporters of those causes.

Lotteries offer significant potential for big business, fund raisers, managers and charities alike. They tend to rely on data bases of existing causes.

The National Lottery may have a lot to answer for in how it has changed our approach to charity.

Hybrid Animal between Business and Charity

Support Adoption for Pets  Registered Charity 1104152 also registered with the Gambling Commission.

The charity provides support for national animal welfare organisations and locally based re-homing centres through a combination of grants, joint fundraising activities and events. The charity also operates small animal adoption centres in a large number of pets at home stores.

Cross Between Business & Charity

  • Support Adoption for Pets is an independent charity established by Pets at Home in 2006
  • The Charity address is c/o Pets at Home, Handforth, Cheshire SK9 3RN.  Six of the Trustees of the Charity were also employees of Pets at Home Group.
  • Pets at Home branding and support is closely linked with the charity.
  • The principal funding sources for the Charity are the Support Adoption scheme, operated through Pets at Home stores, whereby donations from new pet owners, fundraising within stores, till donations, ‘Rounding Up’, charity boxes and bespoke store fundraising events contribute to the £3.6 annual income.
  • Pets at Home have 400 stores offering a  re-homing service for small pets.
  • Support Adoption for Pets offer funding support to pet re-homing organisations through a Grant Programme. The list of testimonials is impressive.
  • Private equity investors Kohlberg Kravis Roberts  recently bought the Pets at Home retail chain for a reputed £955m. They must appreciate and value the close link to this charity.
  • In a further business link the charity has a lottery managed by The Unity Lottery.  Unity itself is further administered by Sterling Management Centre, a registered External Lottery Manager.