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The National Lottery: 25 years of gambling and charity funding

For 25 years now, millions of people have been winning and (mostly) losing money on the UK’s National Lottery. And while it has created much personal wealth and raised significant amounts for various good causes, the lottery’s creation and its impact on society have been the source of deep political division.

The small chance of becoming unimaginably rich by picking out the right line of six numbers for a £1 fee was immediately popular, and came about during a time of significant political change.

After John Major succeeded Margaret Thatcher as prime minister in November 1990, he hoped to adopt a more conciliatory and unifying approach to governance. He wanted, he said, to govern a nation “at ease with itself”.

This reflected a feeling within both the Conservative Party and perhaps the wider public that the Thatcher era had developed an image of harshness, division and severity. In particular that there had been too much emphasis on economics and individualism at the expense of community activity and society.

Major appeared to offer a revised social policy narrative. The hope was that such an agenda could revive his party’s fortunes and reunite the country.

Indeed, Major was a much more enthusiastic advocate of public services than his predecessor. He also expressed nostalgic attachment for British customs and traditions, and was openly supportive of artistic, cultural and leisure activities – things he felt were vital to enhancing the country’s image and bringing people together.

The difficulty for a more caring and compassionate form of Conservatism was how to fund it. After all, the Conservatives had spent the previous decade cultivating a reputation as an individualistic, tax-cutting party of the smaller state.

So when the National Lottery was launched in November 1994, it was seen by Major and his cabinet as the ideal vehicle to raise funds to support their social and cultural programme.

John Major in it to win it 1994. BUTLER/PA Archive/PA Images

In effect, the lottery could be seen as an innovative way of funding public services while keeping personal income tax rates at a historically low level. About one-quarter of lottery funds have consequently supported “good causes” defined by the government.

Over the past 25 years, governments have all sought to use lottery funds to reinforce and subsidise expenditure in various areas of public policy – particularly wider public access to sport, culture and heritage.

As a communal activity, a collective “gamble” in the hope of winning a financial windfall – while supporting communal causes – could also be seen as having a positive social impact. And from Major’s perspective, it arguably offered something “fun” to bind the country together after the bleak period of recession in the early 1990s.

But not everyone has seen the lottery’s impact as a win-win situation. The policy had a less favourable reception from the more traditional factions of the Conservative Party, for example, who viewed the lottery as state encouragement of gambling.

Other critics saw it as a form of stealth tax from which government funding was boosted by a voluntary – yet potentially harmful – leisure activity.

Those on the political Left, meanwhile, voiced concerns that the use of lottery funding allows governments to pass the buck on their own spending responsibilities and to not distribute funds fairly.

Rolling over

But a quarter of a century on, the National Lottery still appears to have public support. For while initial levels of enthusiasm may have subsided in recent years, an estimated 50% of the population still buy a ticket at least once a month.

Now a normal part of everyday life, the lottery can be viewed as one of the most positive legacies of the Major administration. It has provided funding opportunities for social mobility, particularly in sport, where it has challenged domination by the higher social classes. Many have specifically credited it with being a decisive factor in Britain’s highly successful performance at the 2012 London Olympics.

Overall, National Lottery funding has evidently had a positive and significant impact on both individuals and communities. It has created more than 5,000 millionaires and raised an estimated £40 billion for good causes.

This has ultimately allowed various governments since the Major era to channel a new source of funding into various public spending commitments. But concerns have been raised that the amount going to good causes has slowed down, while critics have continued to point at the lottery’s failure to address the potentially negative impact of gambling as an activity.

Now facing a multitude of smaller yet growing competitors such as the Postcode Lottery, Major himself has voiced concerns about such rivals due to increasing competition reducing the National Lottery’s potential funding for good causes.

With the lottery licence due for review in 2023 – and the growth of more diverse online gambling trends – it remains to be seen whether a state funded lottery survives in its current form for another 25 years. You might not bet on it.

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