Why Did the UK DCMS Clamp Down on EuroMillions Betting?

Why Did the UK DCMS Clamp Down on EuroMillions Betting?

Following an announcement from earlier in the year, the UK government has officially confirmed that it will soon prohibit all third party betting on the EuroMillions lottery – a move that is ‘unjustified’ according to one of the largest online lottery betting firms in the business as well as analysts throughout the industry!

Making Good on Promises

It was announced back in March 2017 that an open consultation had been launched with a working title of ‘Prohibiting Third Party Betting on Non-UK EuroMillions Draws’ by the UK Department for Culture, Media and Sport (DCMS), who had received a number of complaints from the main National Lottery operator Camelot.

It claimed that third party firms were undercutting its profits by offering players tickets at a reduced rate that did not reflect the national price increase. In September Camelot confirmed that it was increasing the price of a EuroMillions ticket to £2.50, which prompted third party retailer Lottoland to freeze prices at the £2 mark.

This resulted in Lottoland enjoying a 536% increase in sales in the immediate aftermath of the move – a perfect indicator of supply and demand in action. But Lottoland’s joy was short-lived after the DDCMS released the results of its consultation.

These revealed plans to introduce a licensing system that would prohibit UK players from betting on EuroMillions draws with third party vendors. It’s a system that’s already in place in Australia and other worldwide jurisdictions. The 'betting on’ aspect is central to the whole argument.

Section 95 of the Gambling Act 2005 prohibits gambling operators from taking bets on any of the National Lottery managed draws, which is, in essence, what they are doing. Lottoland itself was fined some £150k for misleading customers as it, according to the authorities:

"did not make it clear to consumers that they were betting on the outcome of a lottery draw and not actually taking part in a lottery."

The fine was donated to charitable causes. Camelot and the National Lottery donate a percentage of their takings to charities in the UK and beyond, while third-parties have drawn criticism for not following suit – the DCMS noting in its consultation that the returns to good causes would decrease if third parties became too ‘widespread’.

Land of Non-Opportunity

The DDCMS referenced third party lottery retailers such as Lottoland rather liberally in its consultation notes, and was keen to stress that it was ‘mindful of the effect on impacted businesses’ that was likely to arise from the new legislation.

It also confirmed that the licensing conditions put into place have the sole aim of reducing customer confusion, rather than cutting into profit margins. But Nigel Birrell, the CEO of Lottoland, responded by saying the DDCMS’s decision is:

"unjustified... would do nothing but stifle innovation in the sector and would set a dangerous precedent for policy-making on the basis of no evidence."

That latter remark was a direct reaction to DCMS’s revelation of its belief that returns to good causes would decrease if firms like Lottoland continued to grow. It was felt this was ‘an assumption’, with no concrete data to back up the claim. Birrell continued by saying that the results of the consultation would:

"have a significant impact to our UK business, and we are reviewing all available options before determining our next steps."

The change to the licensing terms could not have come at a worse time for Lottoland, which has just announced its UK-only EuroMillions Special Jackpot offer, which increases the lottery’s top prize to £200m for players betting via the firm. It’s an amount that would break UK lottery records if it were scooped by one lucky winner.

The Millionaire Maker

The EuroMillions brings together lottery enthusiasts and punters from across the UK and beyond. It was started by the UK, France and Spain, but there are now nine participating nations, creating a huge prize fund that has seen countless millionaires made since its foundation in February 2004.

The jackpot is a guaranteed €15 million every Tuesday and Friday – hence its popularity with punters – and this rolls over each time the top prize isn’t won. Players have the task of correctly selecting five main draw numbers (from 1-50) plus two lucky stars from (1-11) to land the jackpot, hence the high number of rollover that can occur. The jackpot often runs to the topside of €100 million!

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