The following is a summary report shared with NICVA, Department for Communities and the Charity Commission for Northern Ireland highlighting issues in the practice of fundraising from society lotteries in Northern Ireland.
Recently letters have been sent to charities reminded them of the regulations by the Department for Communities and articles released on the Charity Commission for Northern Ireland website. Still, you don't have to go far to find illegal and non-compliant lotteries, sometimes unfortunately run by household name charities. In one County Down village you can buy illegal lottery tickets from a stand right beside a National Lottery stand (for a local GAA club) inside a local supermarket chain store.
To highlight some of the issues and to increase the lobby to change the law I presented this report and action plan to stakeholders calling for action to inform, regulate and in some cases enforce legislation. The work of Good Raffle C.I.C. is part of this initiative to get good raffles, lotteries and ballots in Northern Ireland - not to stop them happening but to increase the income to charities from this very popular fundraising method..
The report
The
State of Non-National Lotteries in Northern Ireland. Summary Report and
Follow-on Recommendations by niFundraising of “Good Raffles for Good Causes
November 2017”
In the summer of 2017, Freedom of
Information requests were made of every council area in Northern Ireland about
the number of registered Society Lotteries, the amount they raised in proceeds
annually, the amount given in prizes and the amount allocated to expenses.
The information was sought as
part of an initiative to understand how much income was being raised through
registered lotteries to enable comparison with Great Britain and inform work to
increase the fundraising income to the charity and not-for-profit sector in
Northern Ireland.
The FOI request was also
undertaken to inform which societies were registered in Northern Ireland – and
therefore those that were not registered.
MAIN FINDINGS OF FOI TO COUNCILS
The main finding of the report
are as follows:
•
There were in total 176 society lotteries
registered with councils in Northern Ireland The councils with the
most registered society lotteries was Belfast (43), then Mid & East Antrim
(25) then Ards and North Down (23) then Causeway Coast and Glens (21) and
Newry, Mourne and Down (21)
•
The councils with the fewest registered society
lotteries were Lisburn & Castlereagh
(2) Mid-Ulster (2) and Antrim and Newtownabbey (3)
•
6 out of the 11 councils areas had 12 or less
registered society lotteries.
•
7 out of the 11 local councils were unable to
report on the level of proceeds, prizes and expenses because they do not retain
the returns information from registered society lotteries.[1]
•
According to the available figures, the largest
society raffle was run by the RUC Sports Club (at Newforge) with proceeds in
excess of £330,000 annually.
As part of out research and feasibility
planning niFundraising discovered what it believes are a very large number of
non-compliant and/or unregistered society lotteries. Rather than in this
document name potentially illegal or not fully compliant societies, the
following lists the main reasons why games fall short of the law.
•
Society lotteries are not registered with the
local council
•
The price of tickets exceeds £1 (in some cases
up to £100 per ticket)
•
It is not possible to buy one ticket at £1
without having to purchase more than one (typically 5 tickets minimum purchase)
•
The required information is not printed on the
ticket
•
Rollover prizes will exceed the limits on prizes
for the next draw
•
Supposed private lotteries are being sold
online, not on the premises and in excess of legal limits of £1,000 proceeds
•
There is a strong likelihood that expenses will
exceed the maximum legal allowance of 15% to 20%.
The issue also with unregistered
lotteries is the potential fraud and misappropriation of funds. There is no
process in these circumstances for games players to know where their money is
going and if they have a fair and reasonable chance of a prize. Some games
provided as little as 0.5% in prize fund.
Regulation and Enforcement
The research conducted by
niFundraising found very clear cases where the Betting, Gaming, Lotteries and
Amusements (NI) Order 1985 was being broken.
In attempts to report this to the
authorities niFundraising met with the following difficulties.
•
The PSNI refused initially to investigate citing
and insisting it was the responsibility of the Gambling Commission for Great
Britain [2]to
enforce. Since they were informed by the Police Ombudsman they should
investigate there has been no follow up in approximately six months.
•
The local council where the potentially illegal
lottery / lotteries were based did not have any concerns, and has not replied
to my concerns.
•
It would take only 5 minutes on the internet to
identify dozens of non-compliant and illegal society lotteries in Northern
Ireland but these appear to operate without sanction.
The Issues of Non-Compliance
Accountability of Trustees:
Unknowingly or otherwise, trustees of charities and other notfor-profit
societies are responsible if their organisation is breaking the law. This has
potentially very serious issues for governance and reputation.
Ensuring Public Trust: The laws
are in place to provide accountability for the public that games are legal,
fair and that the fundraising method can be trusted. There has to be potential
for a scandal in this area, considering the lack of regulation and enforcement.
This could seriously damage public trust and therefore charity reputation and
income across the third sector.
The law does need to change – but
it is what it is: The current law is old and in much need of reform – if only
through secondary legislation or areas such as ticket price, expenses limits
and prize maximums but this ought not to be an excuse to ignore the law - nor
should the apparent lack of enforcement be seen as a green light to run games
that are not fully compliant. There will of course be many instances were
organisations are unwittingly breaking the law through ignorance but this is no
defence.
How to Compete with Illegal Lotteries: It is also very
difficult for legal lotteries to compete for fundraising income with illegal
lotteries offering, on the face of it, greater prizes. They appear to spend
more on promotion and have not the same governance and auditing requirements –
they are enabled to exceed limits on expenses. This hampers the ability of many
charities to fully use this method of income generation that is so successful
in Great Britain – raising around £3billion in a decade[3].
Conclusions
There is a very large number of
unregistered and/or non-compliant society lotteries in Northern Ireland based
on the fact there are so few registered society and the prevalence of games
sold to the general public in Northern Ireland.
There is a strong perception in
the charity and not-for-profit sector (practically an open secret) that most
lotteries are non-compliant but that nobody really cares about it and there
will be no enforcement anyway. However, some charities are so unclear on the
law they don’t use this fundraising method at all.
There appears to be an attitude
and practice within some councils of not discouraging noncompliant lotteries
and not reviewing audit returns for compliance.
niFundraising Recommendations:
•
Raise Awareness of the Law: That Local Councils,
PSNI, Charity Commission NI,
Department for Communities, Institute of Fundraising,
Sports Governing Bodies and Charity Sector Representative Bodies work together
to raise awareness of the nonNational Lotteries legislation in relation to
Society Lotteries.
•
Build Knowledge in Regulation and Enforcement:
That PSNI and Councils work on developing a greater knowledge of the law and
its application in this area – potentially through a series of information
workshops for society lottery registration staff in councils and licensing
officers in PSNI, and the Charity Commission NI.
•
Make a Clear Statement: That a clear statement
is made by the PSNI, Local Councils,
Charity Commission for NI,
Department for Communities, and the Fundraising Regulator that is expects
organisations to fully comply with the lotteries legislation and that were it
is not it will be investigated and enforced – while at the same time encouraging
the method for fundraising when it is within the law.
•
Report Locally on the Figures: That councils
should retain society lottery returns and compile take an open data approach to
these figures so they can be aggregated across Northern Ireland.
•
Maintain a Public List: That councils should
publish on their websites a list of registered society lotteries with guidance
for the public on raising concerns about unregistered and potential
non-compliant games.
niFundraising
The author of this research,
niFundraising, is interested in making sure that Society Lottery fundraising
continues to be a valuable source of income for charities, sports clubs and
other societies going forward. Indeed, the plan is to increase income from
these sources in line with levels raised in other areas of the UK. However,
this is made more difficult for those who want to run legal and fully compliant
games and protect the governance and reputation of their organisation.
niFundraising has been working
with six local charities to undertaken this report and provide a feasibility
plan for developing society lottery income in Northern Ireland. The six
commissioners of this report are six prominent local charities. The views expressed
in this report and this summary are not necessarily those of the commissioners
of the report.
A new social enterprise
not-for-profit Good Raffles C.I.C. has been established by Neil Irwin to
support capacity building in this area.
niFundraising is the trading name
for Neil Irwin MInstF (Dip) former chair of the Institute of Fundraising NI, a
member of the Institute of Fundraising Standards Advisory Committee and a
fundraising advisor, trainer and consultant with over 20 years standing in the
local charity sector.
[1]
By law, society lotteries have to send returns to the local council of their
lottery draws. These are not routinely held by councils.
[2]
The PSNI is responsible for enforcing gambling legislation in Northern Ireland.
The Gambling Commission only has responsibility for England, Wales and Scotland
(Great Britain).
[3] According to Lotteries
Council UK “The State of Non-National Lotteries in Great Britain”
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