A UK government-commissioned study into prize draws has claimed putting the vertical under the watch of the Gambling Commission would offer better consumer protection in the growing sector.
The report, produced by business consultancy London Economics, stated that changes to gambling regulations would be “the most direct and comprehensive means” to address concerns within the vertical.
As laid out in the study, which was commissioned by the Department of Culture, Media and Sport (DCMS), London Economics pointed to six issues related to the prize draws sector.
Those were: reducing the risk of gambling harm, improving the integrity and transparency of the sector, protecting donations to charities, reduced consumer choice, increased prices and dwindling free entry routes.
Alongside a change to gambling regulation, London Economics said a voluntary code of conduct or greater enforcement of consumer protection rules could be other options in managing prize draws.
However, updates to gambling regulation were highlighted as the best potential option for a sector that’s size is estimated to be around £2.1bn at the upper end of the spectrum as of November 2023.
Data in the report stated that 12% of prize draw players had a PGSI (problem gambling severity index) score of eight or above, compared to 5% of all gamblers and 3% of the general population.
The report read: “Of the three interventions discussed, only this would address the core issue that prize draws do not have legally enforced protections against gambling harm that exist for lotteries.
“Bringing prize draws under the purview of gambling regulation would give the Gambling Commission powers to enforce minimum player protection and transparency standards in the market.”
London Economics did state that such changes would not be a quick fix, and that issues could still arise should the government follow its advice.
The report continued: “Gambling regulation may, however, prove cumbersome and risky to amend. It also may make it more difficult for other kinds of organisations to run product promotions or charities to run their own prize draws internally.
“Some stakeholders – such as operators of prize draws – are sure to suffer negative effects. Others, such as consumers and charities, may, respectively, lose enjoyment and donations that they gain from the prize draw industry. Changes to gambling regulation could also provoke unanticipated effects and responses, creating new issues in the process of mitigating old ones.”
The Gambling Commission does not currently oversee the prize draws sector, which includes household names such as Omaze.
The regulator’s CEO, Andrew Rhodes, did state in October last year that the commission would start to target prize draws operators with cease-and-desist orders if required.
At the time, he said “A new cease-and-desist process will be introduced to target the growing trend of prize draws and competitions, which has raised concerns across several departments, including HM Revenue and Customs, the Department for Culture, Media and Sport and the National Crime Agency (NCA).”
EGR has contacted the Gambling Commission for comment.
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DCMS-commissioned London Economics study suggests upheaval to existing regulations would be the most effective way to manage gambling-related harm and consumer protection
The post UK government report calls for prize draws to be put under Gambling Commission’s watch first appeared on EGR Intel.