Why the UK Health Lottery is Under Fire

Author: Anton Johan

When UK media baron Richard Desmond announced his plans to launch a new lottery called the Health Lottery to generate funds for health-related good causes across the UK a few years ago, he was heartily slapped on the back. However, even though the Health Lottery is now up-and-running, it's been anything but plain-sailing.

Desmond, who owns the Daily Express and Channel 5, was no doubt not expecting his lottery to be as controversial as it has been. His brainchild landed in the spotlight soon after it was launched when it was revealed that it donates a smaller percentage of its revenues (20.4%) to good causes than the UK National Lottery (28%).

Health Lottery Could Cost Good Causes £11.6m a Year

This is important because statistically if the Health Lottery ticket sales 'cannibalize' sales from the UK's National Lottery and Hospice Lottery as projected, the lower good cause percentage rate could, in fact, mean that as much as £11.6 million pounds less will go to good causes in the UK each year, which is a pretty sizable amount.

To counteract the negativity of this revelation, the Health Lottery pointed out that it distributes money via 51 society lotteries, thereby spreading 'good cause cash' around far more widely, and perhaps effectively, than the other UK lotteries. It also upped the size of its top lotto prize.

However, the fact the Health Lottery supports 51 local society lotteries is the very root of its next woe, which reared its ugly head last week.

Just as the Health Lottery controversy about its payout percentage to good causes was beginning to wane, it landed right in it again when last week Tory MP Therese Coffey asked Gambling Commission CEO Jenny Williams to tell her why the Health Lottery had been issued 51 licenses - one for each community interest company (CIC) that runs the society lotteries that collectively make up the Health Lottery - despite each CIC being registered in the same place and listing the same three directors?

Health Lottery Cannot be Structured like a National Lottery

The reason for Coffey's question is that under the 2005 Gambling Act, the Health Lottery is not allowed to be structured like a national lottery. And yet that is exactly what it resembles to the average UK citizen. As a result, Coffey is calling for the UK Gambling Commission to hand over all the legal advice it received before it issued the 51 licenses to the Health Lottery.

In response, Williams did not make it clear whether she was willing to hand over the legal advice, saying that the Commission had 'met the legal criteria'. She did, however, admit that Health Lottery's overly complicated company structure was 'designed to get around the National Lottery limits.'

So it should be very interesting to see how the Health Lottery handles this recent controversy and moves forward.