National Lottery

National Lottery, operated in the United Kingdom, one of the largest lotteries in the world. It is played regularly by approximately 70 per cent of British adults. The National Lottery Act, which authorized Britain’s first national lottery for nearly 200 years, received royal assent on October 21, 1993, and in May 1994 the Camelot Group was granted a seven-year licence to run it (this was renewed for a further seven years in January 2002). The weekly Saturday lottery was launched in November 1994, instant scratchcards (Instants) in March 1995, a lucky dip in March 1996, a Wednesday lottery in February 1997, a thunderball draw in June 1999, and a lottery extra in November 2000. In April 2002 the Camelot Group announced the renaming of the main lottery draw as Lotto. Interactive instant-win games were introduced in February 2003, followed by a daily lottery that September and EuroMillions, a pan-European lottery, in February 2004. A series of special lottery and scratchcard games was also launched in 2005 after London’s successful bid for the 2012 Olympic Games was announced: the National Lottery is expected to contribute up to £1.5 billion towards the costs of staging the games.

The purpose of the National Lottery is to raise revenue for five categories of good causes: the arts, charities, heritage, sports, and health, education, and the environment. At its launch, the lottery money was designated as follows: 50 per cent makes up the prize money, 28 per cent is awarded to good causes, 12 per cent lottery duty to the government, 5 per cent retailer commission, 4 per cent on Camelot’s costs, and a further 1 per cent as Camelot’s profit after tax. (In January 2002, as part of its licence renewal, Camelot agreed to reduce its profit share to 0.5 per cent, with the remaining 0.5 per cent going towards running costs.) The five good causes were chosen by Parliament, and 14 distributing bodies decide on the specific allocation of funds: the 4 Arts Councils and 4 Sports Councils (of England, Northern Ireland, Scotland, and Wales), Scottish Screen, the UK Film Council, UK Sport, the Big Lottery Fund, the Heritage Lottery Fund, and the Millennium Commission. The lottery is regulated and licensed by the National Lottery Commission, an offshoot of the Department for Culture, Media, and Sport.

The lottery games are played by buying £1 tickets at one of 26,000 or so official retailer outlets, which include newsagents, supermarkets, and post offices. Tickets may also be purchased online, on interactive digital television, or by text message. To play the main Lotto, the ticket buyer selects six numbers between 1 and 49. At the draw, broadcast live by BBC television, six winning numbers are drawn plus a bonus number. Holders of tickets with all six winning numbers share a jackpot pool, while those with four or more numbers, with or without the bonus number, win appropriately smaller shares of another pool. Holders of tickets containing three of the numbers win a fixed prize of £10. The odds against winning a jackpot prize with one ticket are 14 million to 1, of winning any prize 53 to 1. In the scratchcards game, wins are decided immediately by scratching the surface to reveal whether or not it is a winning card. Prizes range from £1 to £100,000.

The creation of the lottery has been controversial: many critics believe that it has given implicit government approval to gambling, and that the remote possibility of becoming a millionaire overnight encourages compulsive gambling—often by the people least able to afford it. Others say that it resembles regressive taxation in taking money mainly from the poor to sponsor projects of more interest to the rich, and some of the larger awards have been criticized because of this, for example, the refurbishment of the Royal Opera House. In its defence, the organizers point out that more than half of the awards made so far have been to small projects for sums less than £25,000. Information on how to apply for awards can be obtained from the Heritage Department of the government or from the organizations mentioned above. The minimum age at which a person can buy a lottery ticket or scratchcard is 16, though concerns have been raised about the difficulty of policing online or digital transactions for underage participants.

At the beginning of 2002, when Camelot’s licence was renewed, total sales from the national lottery had reached £35.8 billion. By 2006, annual sales had grown to £5 billion; of the total lottery revenue, more than £28 billion had been paid out in prize money (creating over 1,900 millionaires), and more than £19 billion awarded to good causes. Camelot’s licence is due to expire in January 2009.