Agenda item

The ICT Transformation Manager presented the Redditch Local Lottery report together with Mr Nigel Ashton from Aylesbury Vale District Council.  During the presentation of the report the following points were highlighted for Members’ consideration:

·                Aylesbury Vale District Council had been the first local authority to establish a local lottery scheme three years previously.

·                The lottery scheme had been very successful in Aylesbury and the officers from that authority had provided support to Redditch Borough Council in developing the business case for a Redditch local lottery scheme.

·                Under the proposed scheme anybody could buy a lottery ticket on the website.

·                Lottery tickets would cost £1 and 50 per cent of that would be contributed to supporting good causes.

·                The Council would need to spend £10,000 on set up costs and a further £2,500 per year on running costs.

·                There was the potential that the Council could secure £60,000 per annum from the scheme.

·                The odds of winning the £25,000 jackpot were one million to one.

·                All lottery funds would be managed by an external company on behalf of the Council.

·                There would be no roll over but if more than one person had the winning numbers they would all receive £25,000.

·                There was a risk that people might choose not to participate in the lottery which would impact on income.  The Council could then choose to end the service.

Following the presentation of the report Members discussed a number of points in detail:

·                The Council lottery scheme could provide consistent funding to local charities on a monthly basis.  This might help voluntary and community sector (VCS) groups to secure more sustainable funding.

·                The potential to raise £60,000 for the Council from a local lottery could have a positive impact on the Council’s finances.

·                Local lottery schemes had been delivered successfully in other parts of the country when following the model of delivery detailed in the report.

·                Concerns were raised about potential moral and ethical issues arising from the introduction of a local lottery scheme which could potentially encourage gambling.  Officers suggested that as the scheme involved payments online of small sums participants would not have the instant gratification that might come from playing on fruit machines. 

·                Members were advised that participants would be restricted to purchasing up to £5 of tickets only.

·                Concerns were raised about funds raised from gambling being used to provide financial support to public services.

·                Questions were raised about the number of people who would need to buy a ticket in order to generate £60,000 for the Council.  Officers explained that 2,046 players would need to participate per week to achieve this figure.

·                Members also asked about the amount of local market testing that had been undertaken in Redditch to test demand for the service.  Whilst there was little information available about this Members were advised that Redditch was not very different to the 57 other places in the country where a local lottery scheme had been introduced.

·                There had been no complaints in Aylesbury in the three years that their lottery scheme had been in place.

·                Concerns were raised about the potential for the local lottery to encourage young people to gamble.  Members were advised that the lottery would not be open to those aged under 16 and participants would be required to have a bank account.

·                Whilst some people would participate in the local lottery in order to make money many would be taking part to raise funding for local good causes and in other parts of the country some had returned their prize and asked for it to be given to charity.

·                Participants could choose the charity that received the funding, though 30 per cent of participants did not make a selection.

·                It would take time to raise awareness of the local lottery and this would require effective marketing.

·                Local charities would need to promote the scheme to residents as this would be in their interests.

·                Members noted that the Grants Panel already provided grants to local VCS organisations and this ensured that services were provided in the community that the Council might not otherwise be in a position to support.

·                Concerns were raised that vulnerable people on low incomes might spend their limited resources on lottery tickets.  Members were advised that the company managing the lottery would do their best to make sure that people in this position did not use up their finances on the lottery.

·                Members questioned how the management company had been selected and whether this had involved a proper procurement process.  Members were advised that there were very few suppliers of this service and this was the most frequently used company across the country.

·                The arrangements in place at local authorities in other parts of the country, in terms of management of these schemes, were briefly discussed.  Members were informed that the schemes tended to fail where Councils opted to manage the lottery.

·                Questions were also raised about what happened to funds when there was no jackpot winner as there was no rollover.  Members were advised that over the past three years the jackpot had only been won twice.  There was the potential to offer bonus prizes where funds built up.

RECOMMENDED that

1)        the associated business case and the establishment of a local lottery be approved;

2)        the preferred option to appoint an External Lottery Management (ELM) is approved and the appointment of Gatherwell Ltd is progressed;

3)        two officers are appointed to be responsible for holding the license and submit the necessary application to the Gambling commission.