How could a district lottery be introduced to Harrogate?

Councillors believe the introduction of the lottery system will help support the voluntary and community sector in the face of decreasing central government funding.
Councillors believe the introduction of the lottery system will help support the voluntary and community sector in the face of decreasing central government funding.

A new online lottery could be introduced to Harrogate, the proceeds of which would go towards supporting community projects.

Harrogate Borough Council will decide at tomorrow's session of Cabinet (Wednesday, October 18) whether or not to introduce the Harrogate District Lottery.

Councillors believe the introduction of the lottery system will help support the voluntary and community sector in the face of decreasing central government funding.

Councillor Graham Swift, Harrogate Borough Council’s Cabinet Member for Resources, Enterprise and Economic Development said: “Voluntary and community sector organisations play an important role in our community. Through the council’s small grants scheme we have been able to provide funding for a wide range of organisations so that they can turn their ideas into reality, and we are currently developing a Harrogate District Community Fund which will provide additional support in the future.

“Community lotteries have been introduced by council’s up and down the country and they have proven to be extremely successful, as they provide a source of increased funding and they strengthen the security of the funding for the long term.

“With budgets under increasing pressure from government cuts, it is important that we look at how we can continue to support good causes. The introduction of a district lottery is one such way which would also enable members of our community to have a stronger say on which organisations they would like to support.”

How would funding and prizes work?

An initial model of the lottery offers two ticket types, one where 60 per cent of the proceeds would be distributed through the Council's Harrogate District Community Fund Small Grants Scheme and another type where 50 per cent go to the player's chosen good cause.

10 per cent of this second type would also go to the Harrogate District Community Fund. A ticket is currently expected to cost £1 and draws held every week, winners would receive a prize made up of 20 per cent of the overall ticket sale.

None of the proceeds would be taken by the council and the lottery would be online only.

Where did the idea come from?

HBC researched other councils from across the country who have attempted similar schemes, including Aylesbury Vale and Amber Vale District Councils.

Both of these found that to cover the costs in operating a lottery they opted to run it online, due to the potential high costs of distribution and sales.

HBC noted that the lottery would be run through a dedicated website, although voluntary and community sector organisations could have their own pages, for sales of all ticket types to 'keep operating costs to a minimum.'

Aylesbury Vale District Council was also the first local authority to set up an online lottery like this, raising over £70,000 for the VCS in the first year of operating according to the council.

Holding a survey in 2016 HBC asked residents questions including do you agree that a Harrogate District Lottery should be established to continue funding the voluntary and community sector across the district? To this particular question 55 per cent agreed while 17 disagreed.

How will they run it and what could it cost?

It has been recommended in a report going before cabinet that the council opt out of running the system themselves. Creating new posts and software could potentially cost between £80,000 and £100,000 if they did so.

Instead it has been recomended that the council seek external support, sharing the risk of delivering the lottery while undertaking the role of running of it including ticket payments, licensing and marketing. These 'External Lottery Managers' would then take a 'minimal one off setup fee and percentage of the ticket fee.'

An initial set up cost for the ELM would run between £3,000 and £5,000.

As a local authority, the council would need to be licenced by the Gambling Commission, a one off application fee varies from £163 to £244 depending on how much income is generated. The annual fee for the license would cost between £348 and £692.

How long would it take?

A timetable produced by HBC suggests that if approved they expect to award a contract for an external lottery manager by January next year, while a license is expected to be granted by March at the latest.

Planning ahead the council also have included a scheduled slot from between April and March to announce what the lottery is and what it could do as tickets become publically available.The first draw is timetabled for July.