THE FUTURE OF THE NATIONAL LOTTERY

COMPETITION LAUNCH THE ROLE OF THE GAMBLING COMMISSION

The Gambling Commission is the UK’s independent, statutory body responsible for awarding the licence to run the National Lottery and tasked with regulating it to ensure safe and fair play.

FOREWORD The current licence is due to expire in 2023. by Chief Executive, Neil McArthur

As part of our responsibility as a regulator, we have three overriding In its first quarter of a century, the These changes will enable the next statutory duties: National Lottery has raised more licensee to continually develop and adapt 565,000 than £41 billion for 565,000 good its operations in a safe and responsible GOOD causes, transforming lives through 1 way, to meet the needs of players CAUSES ENSURING THE NATIONAL its contribution to the arts, sport, in 2023 and beyond. heritage and communities up and down LOTTERY IS RUN WITH PROPRIETY the UK. Building on this success, today We have a strong track record of the competition to award the fourth safeguarding the National Lottery National Lottery licence begins. 2 and ensuring that it is run with integrity, ENSURING THAT protects players and maximises PARTICIPANTS’ INTERESTS There have been three competitions contributions to good causes. 12 MILLION ARE PROTECTED, AND for the licence to run the National LOTTO Lottery and the current licence is due to We want to build on the tremendous 3 expire in 2023. The role of the Gambling success of the National Lottery and PLAYERS (SUBJECT TO THOSE TWO DUTIES) Commission is to run the National Lottery we are determined to run a fair and EACH WEEK DOING OUR BEST TO ENSURE THE licence competition and, subsequently, transparent competition process that PROCEEDS FROM THE NATIONAL regulate the next licence. provides opportunities for innovation LOTTERY ARE AS GREAT AS and creativity while protecting the unique POSSIBLE Since launching the fourth licence status of the National Lottery. programme in November 2018, we have conducted an extensive programme Throughout our market engagement, OVER of global market engagement through we have been encouraged by a healthy £41 BILLION Whilst the Gambling Commission which we have spoken to many interested level of interest from a range of different is responsible for managing the parties to help us develop our thinking parties and we look forward to running RAISED competition and regulating the on policy issues. a competitive process. National Lottery, the distribution of funds it generates is separate. This document provides an overview If you would like to find out more about of the programme to-date, while also the competition or want to speak to our This is carried out by independent setting out the next steps as we progress team, please find our contact details in distribution bodies, overseen by through the competition. You will also this document. the Department for Digital, Culture, find a summary of the most significant Media and Sport (DCMS) and the changes that will be introduced for the devolved administrations. next licence.

Neil McArthur Chief Executive

2 | 3 4th National Lottery Licence Competition | The Future of the National Lottery CHANGES IN THE FOURTH LICENCE

DESIGNING A LICENCE THAT FOCUSES ON PERFORMANCE

The competition to award the Since 2018, we have been carrying We are seeking to create a level The next licence will begin in 2023. Our approach to regulation will fourth National Lottery licence out an extensive programme of playing field for all potential Building on the National Lottery’s ensure there is clear accountability is now underway. The next licence global market engagement to help applicants and will run a fair, open success to-date, we will ensure the for the National Lottery’s will begin in 2023. inform the design of the next licence. and robust competition to help us licensee’s incentives are closely performance. This will enable the We appointed Rothschild & Co as lead meet our statutory duties with regard aligned with contributions to good licensee to focus on delivering The context for the National Lottery adviser, responsible for engaging to propriety, player protection and causes. We will also provide it with agreed outcomes by providing has changed since 2009, when the third interested parties ahead of the contributions to good causes. the flexibility it needs to continually the flexibility needed to maximise licence was awarded. For example, launch of the competition. Through develop and adapt its operations in contributions to good causes, technology-based products and these conversations, we have gained This document sets out the most a safe and responsible way, to meet while ensuring that objectives services have been widely introduced invaluable insight that has helped significant changes in the fourth the needs of players and maximise are achieved hand in hand with safe and continue to change rapidly. us design a licence to maximise licence, all of which will build on the contributions to good causes in and fair play. contributions to good causes. National Lottery’s amazing legacy, 2023 and beyond. towards a sustainable and The following is a summary of the In addition to potential licensees, successful future. Recognising that the world is likely to most significant changes that will we have been engaging with be very different by the time the fourth be introduced for the fourth National key stakeholders, including the licence concludes in 2033, the next licence Lottery licence. organisations responsible for will enable and incentivise the licensee distributing National Lottery funds, to adapt, in a safe and responsible way, to keep them informed of progress according to technological advancements, and ensure their views are new opportunities, and changes in incorporated into the next licence. consumer preferences.

4 | 5 4th National Lottery Licence Competition | The Future of the National Lottery 4 6 LENGTH BRANDING OF LICENCE

The licence will run for a fixed 10-year The National Lottery is a national period. There is no provision for the asset. This is backed up by research licensee to request an extension. which shows that 98% of people in Great Britain have heard of the 1 This means that the licensee will have National Lottery. a clear period for investment planning. A ten-year fixed term will also create Under the terms of the licence, a competitive environment which the licensee must do everything it will benefit the long-term interests can to safeguard and promote the of the National Lottery. reputation of the National Lottery, as well as the value, integrity and This fixed period will incentivise strength of the National Lottery the licensee to adapt – in a safe brand. To achieve this aim, the 1 2 and responsible way – to meet licensee will be required to foster PLAYER MONITORING technological advancements, stronger relationships with the PROTECTION PERFORMANCE new opportunities, and changes distributors of National Lottery in consumer preferences. funding to further strengthen the link between the brand, its players, and good causes. The licensee will be held fully The licensee will be empowered accountable for protecting players. to respond to technological 5 We will require the licensee to advancements, new opportunities, CHANNELS report regularly against key and changes in consumer preferences. OF SALE performance indicators to Through the competition process, demonstrate the performance the successful applicant will have of the National Lottery brand. demonstrated high standards of The licensee will be more accountable player protection, commensurate for compliance, however, they will be to its games offering, including required to provide annual, and ad The outcome-based approach in on prevention of underage or hoc, assurance statements to the the fourth licence will provide the 7 excessive play, and we will hold them Commission to evidence how they licensee with flexibility to innovate, PORTFOLIO accountable for their commitments have met their obligations. We will have whilst ensuring they continue during the licence period. We will strong enforcement powers and will to meet high standards of player retain strong enforcement powers intervene, when necessary, backed protection and propriety. and will use them if necessary. by a comprehensive system of The licensee is responsible for

monitoring and reporting. The licensee must ensure players can maximising the appeal and easily enjoy games through a range of accessibility of National Lottery sales channels. For example, they will products to those who are eligible need to maintain a physical point of to play. 3 sale in postcode districts with more INCENTIVE than 2,000 residents. In the next licence, we will MECHANISM streamline the process for games approval to allow greater flexibility and improved time-to-market. We will safeguard key features of the Since the National Lottery’s National Lottery, for example, by inception more than a quarter ensuring that the licensee guarantees of a century ago, more than £41bn at least one draw-based game, with has been raised for good causes. life-changing prizes, every week.

We will build on that success through a restructured incentive mechanism which will ensure the licensee’s incentives are closely aligned with contributions to good causes. The licensee will, therefore, be incentivised to develop and grow National Lottery 1 sales and, thereby, its own returns and YouGov Ratings data collected from a sample of 8,823 panellists between June 2018 and June 2019 the contribution to good causes. 6 | 7 4th National Lottery Licence Competition | The Future of the National Lottery COMPETITION TIMELINE

This timetable is provided for general guidance. All dates are indicative and subject to change.

Stage Timeframe

Selection Questionnaire (SQ) August 2020 to October 2020

Invitation to Apply (ITA) October 2020 to July 2021

Announcement of preferred applicant September 2021

Fourth licence award October 2021

Transition period October 2021 to July 2023

Fourth licence begins August 2023

GET IN TOUCH

If you would like to hear more about the competition, please contact the team at [email protected] . www.4nlc.com