Research on the market for ad hoc lotteries

Organising a lottery in the Netherlands is not allowed without a permit. Various types of lotteries require different permits. Most lotteries are known as 'artikel 3-lotteries', named after Article 3 of the Betting and Gaming Act which allows them. Within this category, a distinction is made between non-incidental lotteries (more draws, longer duration, such as the Postcode Lottery) and incidental lotteries (fewer draws, limited duration). For incidental lotteries (limited in duration and number of draws), a permit can be obtained from the Kansspelautoriteit if the prize pool exceeds €4,500; otherwise, it must be obtained from the municipality where the draw takes place. This permit is subject to several conditions, including spending 40% of the proceeds on a charitable cause. Dialogic conducted research on the market for incidental lotteries on behalf of the WODC. Currently, the number of incidental lotteries organised annually is unclear. In recent years, 'white label platforms' have emerged - companies that assist in organising lotteries on behalf of permit applicants. The research provides insights into the market size, the role of white label platforms, and the potential issues arising from their emergence in the market. To conduct this research, data on granted permits from the Kansspelautoriteit and municipalities were collected, and interviews were conducted with stakeholders in the field, including lottery organisers, white label platforms, charities collaborating with white label platforms, as well as regulators and policymakers. Additionally, a survey was conducted among board members of associations and foundations, and lottery pages of municipal websites were examined. Finally, comparable regulations in Denmark, the United Kingdom, and France were reviewed. Estimating the exact market size is challenging: data on the number of permits from all municipalities are not available, and information on the number of unlicensed lotteries is limited. The data available does not show a clear increase or decrease in the number of incidental lotteries. However, there has been an increase in the number of tickets requested for larger lotteries (Ksa permit) since 2020, likely due to the rise of white label platforms issuing more tickets through digital platforms. The research identified three active white label platforms and some that are no longer operational. They have been involved in approximately one in five large incidental lotteries between 2017-2023. It is estimated that they are involved in a maximum of 5% of all incidental lotteries. Based on the data available, there is no indication that they charge non-market-conforming fees. Current supervision requires permit applications from municipalities for small lotteries and from the Ksa for large incidental lotteries. Not all lotteries apply for permits, and many municipalities do not actively monitor this. Supervision of white label platforms can contribute to professionalisation and a level playing field, potentially inspired by foreign regulations (e.g. British external lottery managers). At present, the need for further regulation of white label platforms is not clearly justified by the research findings, as limited indications of issues have been identified. The research was presented to the Second Chamber on 11 September. Read the relevant Chamber letter (Untranslated) here.