Analysis: The impact of the EuroMillions betting ban
Lottery betting operator Lottoland was publicly angered by the UK government’s decision to ban betting on non-UK EuroMillions draws, but was the crackdown really all that much of a surprise?
Words by Julian Rogers
Whenever a regulatory loophole is exploited by individuals or companies it usually isn’t very long before governments step in to close the gap in the law. So when the UK government launched a consultation with stakeholders regarding a proposal to “close the regulatory loophole” which allows UK consumers to bet on non-UK EuroMillions draws with bet-on-lottery firms, the writing appeared to be on the wall.
Almost nine months afterwards, in late November, the Department for Digital, Culture, Media & Sport (DCMS) published its ‘Consultation Response’ in which it announced its intention to prohibit consumers from placing bets on EuroMillions draws outside the UK. The move was primarily about protecting funds raised for good causes through ticket sales.
Bet-on-lottery operators affected by the ban include the likes of Lottoland, Jackpot.com and PlayLottery. “We are obviously disappointed,” says Nigel Birrell, CEO of Gibraltar-based Lottoland which has amassed one million registered users in the UK since launching in 2013.
“[We were] not wholly surprised [though] because the way the consultation was framed it seemed that unless there was a very good reason not to, they were going to go ahead and do it [prohibit betting on non-UK EuroMillions draws]. To that extent, I wonder how much this whole process has been a bit of a rubber-stamping exercise and how much they have listened to us.” He adds: “We don’t think it has been a fairly handled process.” Lottoland ‘et al’ will still be able to offer UK players betting markets on overseas lotteries.
EuroMillions, which has existed since 2004 and nowadays involves nine countries, conducts two draws a week, on Tuesdays and Fridays, from Paris, France. Tickets cost UK players £2.50. However, gambling operators are not allowed to take bets on the National Lottery, including the UK EuroMillions game, as this practice is prohibited under section 95 of the Gambling Act 2005. To circumvent the law, bet-on-lottery companies have allowed UK customers to gamble on non-UK EuroMillions games because although each country’s game relates back to the single draw in Paris, the nine games are technically separate. Due to this technicality, operators lay bets from UK players on the outcomes of EuroMillions draws offered abroad. For example, a bet on the result of the Spanish Euro-Millions draw.
Evidence gathering
During the consultation between 6 March and 2 May, the DCMS received 52 responses from various organisations including National Lottery operator Camelot, the World Lottery Association and a handful of bet-on-lottery companies. There was also feedback from beneficiaries of National Lottery funding, including Sport England and the British Film Institute. The overall response indicated a broad support for the proposal to extend the prohibition. Camelot argued that betting on non-UK EuroMillions games harms returns for good causes, and the company also provided anecdotal evidence of its players switching from purchasing EuroMillions tickets to betting on EuroMillions products.
Yet despite Lottoland submitting evidence suggesting that its product was having no statistical impact on EuroMillions ticket sales in the UK, the government remained concerned that should betting on EuroMillions expand and become widespread, “there is a risk” that EuroMillions sales and good cause returns “may decrease”. It is also important to note that the Consultation Response conceded that current evidence was not conclusive on the future impact on lottery revenues and, therefore, returns to good causes, attributable to betting on lottery products.
Birrell, who says a decision made on the basis of “the sheer weight of numbers of Camelot supporters” sets a “dangerous precedent”, also firmly refutes the suggestion that betting on non-UK EuroMillions draws is currently having an adverse effect on funding for good causes. “There is no evidence us, or people like us, are having that effect at all. We reject that, totally. What I would say is we don’t know if we might have an effect going forward, but right now the evidence shows that we are not.” He argues that instead of making what he describes as a “knee-jerk reaction”, the government should have conducted a two-year investigation into the matter. “We could wait a couple of years and if we did start to see a creeping effect, which we doubt would be the case, then take another view. To go ahead and do it straightaway is just wrong.”
One area the DCMS also examined was the potential for customer confusion between EuroMillions betting and lottery products. Yet surveys submitted by Camelot and Lottoland suggested different levels of consumer confusion. In April, Lottoland commissioned an independent poll among 2,000 of its customers which found that 28% did not believe there was a difference between betting on EuroMillions and playing the EuroMillions lottery. Camelot’s research, which was from 2014, found that only 14% of consumers identified that playing EuroMillions with a betting operator was a bet on a draw in a foreign country, while 61% thought they were participating in the EuroMillions game in the UK.
Furthermore, Camelot submitted communications from some customers questioning why Lottoland was able to charge £2 for a ticket when Camelot’s online and in-store tickets cost £2.50 (EuroMillions ticket prices rose from £2 to £2.50 in 2016). To counter the suggestion of confusion, betting operators highlighted how they had worked with the Gambling Commission to clarify the difference between participating in a lottery and betting on it, including altering the wording from ‘play’ to ‘bet’ and informing consumers that no part of the stake supports good causes (where this is the case).
A foregone conclusion?
Despite the evidence and arguments submitted by bet-on-lottery operators, the DCMS’ ruling didn’t come as a shock to certain industry observers. “The government’s decision comes as no surprise,” says Bahar Alaeddini, a partner at London-based law firm Harris Hagan. “Recent years have seen an increasing overlap in the betting and lottery industries, and concerns have been raised for some time by Camelot, the Gambling Commission and other stakeholders regarding blurred boundaries and consumer confusion.”
Alaeddini adds: “Even when the consultation was launched, it seemed a sure bet that the government would introduce its planned licence condition prohibiting betting on non-UK EuroMillions draws.” David Clifton, director of Clifton Davies Consultancy, also expected this outcome. He says: “Despite the absence of conclusive evidence that betting on EuroMillions draws outside the UK has had any impact on National Lottery income, I do not find it at all surprising that the policy decision outcome of the consultation has been to introduce a ban.”
For Lottoland, the ban comes hard on the heels of the operator being barred from accepting bets on domestic lotteries in Australia. And Alaeddini thinks other jurisdictions are likely to follow the UK and Australia and prohibit betting on national lotteries. “We will have to watch this space to see how a competitive and innovative betting industry responds,” she adds. In the meantime, Birrell says Lottoland is focusing on adding to its suite of 25-plus overseas lotteries that it offers to UK players, although he concedes that the EuroMillions product is “reasonably significant” and the game and brand most familiar to its UK customers. “It isn’t the be-all and end-all, but it’s more the principle of why we should not be allowed to offer a full suite,” he states.
In a statement provided to EGR Intel, Camelot’s head of policy and public affairs, Richard Hickson, said Camelot very much welcomed the government’s decision following “a detailed consultation process”. He added: “We’ve always believed that bet-on-lottery firms have been getting around existing legislation by purporting to offer the same products as the National Lottery while they are, in fact, just offering bets on the outcome of EuroMillions draws. This has created consumer confusion and diverted vital money from the good causes that the National Lottery was set up to support.”
Picture credit: iStock/LPETTET