Sport Lottery Funding
There are about 80 countries, worldwide, that have some type of National Lottery; and multiple lottery products exist in many countries. Within some countries lotteries are sanctioned by regional, state, provincial, territorial, etc. level governments [source: Lotteries by country, Wikipedia].
Key messages
National lottery funding for sport is an established practice internationally, with dedicated proceeds in many countries going to support government investment in sport (e.g. events, infrastructure, programs, athletes).
The potential impact of lottery funding as a contributor to enhancing international competitiveness in sport is best illustrated by the success of the United Kingdom (Team GB) at Olympic and Paralympic Games since the introduction of National Lottery contributions to sport funding in 1997.
Any form of gambling (legal or otherwise) presents potential risks that some degree of social or personal harm may result.
Background
Types of lottery systems
There are a number of different ‘lottery’ systems – the common element being the sale of a lottery product (usually a ticket) with the prospect of substantial reward for the winner, based upon chance.
Popular lottery systems used for the purpose of sports funding are:
- a finite number of tickets to be sold prior to a prize draw;
- a regular (usually weekly) game, with the prize draw irrespective of the number of tickets sold;
- instant prizes identified at the point of ticket sale (e.g. scratch and win);
- selection of multiple winning teams from a week’s sport fixtures, with a points-based scoring system determining the prize pool (e.g. ‘football pools’); and,
- consumers selecting a set of numbers from a given matrix of numbers (or the purchase of a randomly selected set of numbers) to enter a random draw of numbers from the given matrix.
Some systems use the term ‘lottery’ for games that may not rely entirely upon the element of chance (i.e. an element of knowledge or skill can be used in predicting results) – these alternative systems will not be considered in this discussion.
Funding to sport
The exact number of countries where a National Lottery contributes some revenue to sport is unclear. However, many countries that compete favourably at the Olympic and Paralympic Games have a component of sport funding from National Lottery sources, including 24 EU nations; Brazil; Canada; China; Japan; New Zealand; South Korea; and, Switzerland.
The rationale for directing proceeds (part/all) from a National Lottery to sport has generally focused on four main themes:
- to provide long-term financial security for national sporting associations;
- to assist Olympic, Paralympic and Commonwealth Games organisations with their fundraising;
- to assist some of the ‘lesser known’ sports with funding that is critical to their development; and,
- to increase the capacity of grassroots sports to deliver a number of personal and social benefits (e.g. health outcomes, inclusion, community cohesion, etc.).
The strongest argument for the establishment of a National Lottery, with proceeds dedicated to ‘worthy causes’ (e.g. sport, cultural, heritage projects, etc.) is the potential for a non-government revenue stream into those sectors. While acknowledging there would be debate regarding which sports or projects could receive funding, how much they receive, and toward what purpose (e.g. high performance or grassroots programs), there may be other potential impacts of adopting a sports lottery. The flow-on of non-government funding sources might affect state and local government priorities. Would lottery revenue be used to ‘top-up’ state and local funding of sport, or replace it (particularly for facility and infrastructure projects)?
Attitudes and concerns
There is also opposition to National Lotteries; general concerns include:
- jurisdiction oversight;
- fund priorities; and,
- ethical concerns related to the promotion of gambling in sport and gambling more generally.
Many of our attitudes about the value or usefulness of lotteries are based upon our perception regarding participation (i.e. purchase of a lottery ticket) – whether this is gambling (which may be an addictive behaviour for some individuals) or a consumer decision (i.e. discretionary entertainment spending)?
- Sports gambling as consumption: Evidence from demand for sports lottery, Mao L, Zhang J and Connaughton D, Sport Management Review, Volume 18(3), (2015). This report analyses the determinants of sports lottery demand in China. Scholars working in the disciplines of psychology, economics, and sociology, have explored the phenomenon of lotteries. There are two broad theories put forward: (1) that lottery play is motivated by the prospect of gaining ‘something for nothing’ as a form of gambling; and, (2) that lottery play is a consumer activity that is an expression of allegiance with a team or sports in general.
There are also perceptual differences, as well as common ethical issues, between ‘gambling’ on a National Lottery, ‘gambling’ on sport, and ‘gambling’ more generally. Purchase of a lottery ticket is seen as 'gambling' on a random outcome, not on the outcome of a sporting contest; although sport may be a beneficiary of the proceeds. Legal betting on sports events is permitted (within an established framework) by governments, who receive a tax benefit. Other associations between gambling and sport (i.e. advertising, sponsorship, endorsement, etc.) provide significant financial benefit to some sporting organisations. Any association between sport and 'gambling' will present ethical dilemmas for the sport sector.
Sport lottery examples
Australia
In December 2018 the Play for Purpose charity sport raffle was launched. Play for Purpose is a not-for-profit online raffle supported by the 50-50 Foundation, Tabcorp and the Australian Sports Foundation (ASF), and endorsed by Sport Australia (formerly the Australian Sports Commission). The need for more diverse funding sources was identified in the Australian Government’s national sport plan, Sport 2030, and the new raffle is aimed at helping to fulfil that need. Clubs will not be charged to participate in the raffle and a minimum of AU$5 from every $10 ticket will go to club based charitable sporting projects. Funds raised through Play For Purpose must be used for charitable sporting projects.
- Play for Purpose raffle to fundraise for grassroots sports, Sport Australia media release, (19 December 2018).
- Play for Purpose - The Sports and Charity Raffle, Sport Australia, (accessed 9 January 2019). Provides an overview of the Play for Purpose raffle including terms and conditions, FAQs and how to register/apply.
- Club Info Pack, Play for Purpose, (December 2018).
Prior to the launch of Play for Purpose there had been a long history of attempts to develop a national lottery for the Australian sport sector starting with a commercial proposal provided to the Australian Government in 1979. The proposal was subject to the adoption of a legislative framework however, no action was taken at the time.
- A proposal for the introduction of a National Sports Lottery, Carlton Marketing Services, report presented to the Australian Government, Department of Home Affairs, (1979). The objectives of this report were to: (1) identify a case for lottery funding of Australian sports, and; (2) state the business case for an external service provider to deliver a National Sports Lottery. [Held by the Clearinghouse for Sport, GV675.C37]
The issue of a national lottery was discussed again in 1983 by the House of Representatives Standing Committee on Expenditure, during its inquiry into Federal Government assistance to sport and recreation.
- The Way We P(L)AY: Commonwealth assistance for sport and recreation, Parliament of Australia, House of Representatives Standing Committee on Expenditure, (November 1983).
The Committee conceded that there was some support for the idea of a lottery but that States were unenthusiastic about the idea, as they considered it would inevitably erode their own lottery revenue potential. Lotteries in Australia have historically been under the legislative control of State Governments. The Department of Finance advised the Standing Committee that legislative backing would be needed if the Federal Government were to enter into lotteries. There appears to be no provision in the Australian Constitution that grants power to the Commonwealth, with respect to lotteries.
The 1983 Committee agreed with the assessment that a national lottery was not feasible without the backing of the States; but even if that were to be realised, the Committee was not inclined to recommend a lottery proposal. The government of the day was unconvinced that sport and recreation had a high enough priority to warrant preferred treatment over other areas of need, such as health and welfare.
The Department of Finance listed other possible problems if the Federal Government established a National Lottery which included sport: (1) funds for sport would be determined by subscriptions to the lottery, not by the needs of the sporting community or by the government’s priorities; (2) funding sport through a lottery would put sport in a preferred position over other expenditure proposals; and (3) there was potential for wasteful and unnecessary spending in the sport portfolio. The Department of Finance concluded that there was no compelling reason to set sport aside from other worthy programs in this manner. [source: Sports funding: Federal balancing act]
In 1983/84 An Interim Committee was established to look at the underpinning rationale for the role of an Australian Sports Commission. The Interim Committee's report, Chapter 7, ‘Supplementary Funding’ looked at various options to supplement direct government funding of sport, through the Commission. Recommendations regarding funding options had been made in the House of Representatives Committee report The Way We P(L)AY (1983), these were also considered by the Interim Committee, commenting that the findings of the House of Representatives report are open to debate. The Interim Committee appreciated the work that had already been devoted to investigating the option of lottery funding for sport (i.e. reported in The Way We P(L)AY) and recommended that a ‘Sportbonds’ concept was worthy of further study.
- Report to the Minister for Sport, Recreation and Tourism, Interim Committee for the Australian Sports Commission (March 1984). p79
In 1993 Sydney was awarded the 2000 Olympic and Paralympic Games. During the lead-up to the Games the idea of a National Lottery, with dedicated proceeds to sport, gained popularity.
In 1995 a proposal to introduce a National Lottery to assist with the staging of the Sydney Olympics was raised before another House of Representatives committee.
- Olympics 2000 … and the winner is? Parliament of Australia, House of Representatives Standing Committee on Industry, Science and Technology (June 1995).
At the time it was unclear whether an Australian National Lottery would tap uncommitted sources of money, given the plethora of gambling opportunities already available to the public. It seems intuitive that a National Lottery could divert funds away from other beneficiaries and thereby deprive the States and Territories of tax revenue.
Research (principally from the United States) has shown that Lottery sales, and their subsequent tax revenue, can remain stable over long periods of time. This research also suggests that lottery tax revenue remains stable during periods of both general economic growth and recession.
- State Lottery sales and economic activity, Mikesell J, National Tax Journal, Volume 47(1), pp.165-171, (1994). This paper measures the income elasticity of lottery sales across the economic climate in the United States, over a 10 year period.
Prior to the Sydney Olympics a Sport 2000 Task Force was formed to review the state of sport in Australia. One of the Task Force’s terms of reference was to investigate sources of ‘off budget’ funding for sport. The Task Force considered a number of options for supplementary funding and looked at a National Lottery system, but rejected the idea because of the possible social and economic implications of gaming, as well as possible constitutional impediments.
As the Sydney Olympics approached, the Task Force again looked at the lottery funding issue and concluded that additional sources of revenue, apart from government appropriations, would benefit sport; but the Task Force also agreed with previous evaluations that constitutional validity could be an obstacle to a National Lottery.
- Shaping Up: A review of Commonwealth involvement in sport and recreation in Australia, Oakley R, Sport 2000 Task Force, (1999). Recognising the importance of elite sport, participation in sport and recreation activities, and the economic and social significance of the sport and recreation industry, the Commonwealth Minister for Sport and Tourism, the Hon Jackie Kelly MP, established a review of the Commonwealth’s involvement in Australian sport and recreation as a precursor to the development of a sport and recreation policy to take Australia beyond the Year 2000.
In 2008, the (then) Minister for Sport, Hon. Kate Ellis MP, stated (with reference to a federal sports lottery) “with the different State and Federal jurisdictions, that would have been not possible by the government at the time, but one thing I am very keen to do, and we've announced a process, to look at ways we can broaden the funding base for Australian sport, and I doubt very much that that will come up with a lottery being a viable option for us, but I do hope that there's ways that we can restructure the current system, so that we can get as many dollars going towards our athletes as possible.” [Source: Lottery sports funding is not an option: Ellis, ABC AM Program, (19 August 2008)]
The Crawford Review (2009) looked at the structure of Australian sport. This review iterated the findings of previous inquiries on the issue of a National Sport Lottery; highlighting the constitutional hurdles. The Crawford Review concluded there were enough opportunities available for people to engage in gambling, so another lottery was not warranted. The Crawford Review made a number of recommendations regarding responsibilities for program funding, including: (1) for elite sport, the Australian Government should be responsible for support of national level programs; (2) State and Territory Governments should be responsible for state and territory level programs and collaborate with local governments for developmental programs; and (3) sports funding should be maintained at existing levels.
- The Future of Sport in Australia, Crawford Review, Independent Sport Panel, Crawford D, Australian Government, (2009).
The 2010 Australian government policy document, Australian Sport: the pathway to success (p.22), provides a response to the Independent Review’s (i.e. Crawford) recommendation 8.4, “The Australian Government should not introduce a national sports lottery at this stage, but should negotiate with state and territory governments to provide a share of existing lottery revenue for sport and recreation facilities and programs.” The Australian Government agreed that a National Sports Lottery was not warranted at that stage.
Within the past two years, advocacy for a National Sports Lottery as a funding source for Australian sport has been taken-up by the Chairman of Sport Australia, John Wylie AM. Mr Wylie has commented on the need for Australia to provide adequate funding for international sporting success, particularly at Olympic and Paralympic Games.
"For Australia to maintain its record of elite success, there’s no doubt we will need more funding over time. Other countries are investing more and the environment is much more competitive, and we owe it to our athletes to provide the necessary support. More funding will be needed and we have to think about where that funding will come from, so we want to look at a sports lottery. We are going to look at it very, very seriously. Many other countries have the benefit of funding from a lottery, including some of our closest competitors".
John Wylie AM ‘Australian Sports Commission pushes lottery to drive success’, Jeffery N, The Australian, 28 November 2015
Case studies
Western Australia’s Department of Local Government, Sport and Cultural Industries supports the development of a sustainable and diverse sport and recreation system that encourages participation, develops talent, and contributes to the health and wellbeing of individuals and groups in the state. Significant (although not complete) funding is provided by Lotterywest through the Sports Lotteries Account.
Legislative authority for Lotterywest was established under the Lotteries Commission Act 1990, which requires 5% of net subscriptions be made available to the Ministry for Sport and Recreation. In 2019 this represented AUD$13.8 million [source: Annual Report 2018/2019, Department of Local Government, Sport and Cultural Industries, West Australia Government].
In addition, the Gambling and Wagering Commission Act 1987 allows for distribution of funds to the Department’s Sports Wagering Account for use on physical activity programs, research, and initiatives to increase participation. A point of consumption tax was introduced on 1 January 2019 to replace the tax regime that previously applied to wagering in Western Australia. As well as simplifying wagering taxes, the new tax regime ensures online wagering operators pay tax on wagering conducted in Western Australia. Under the new regime AUD$13 million was contributed to the Sports Wagering Account from 2018-2019 to 2021-2022 to support community sport and recreation.
Australia
There had been a long history of attempts to develop a national lottery for the Australian sport sector.
International
The Interprovincial Lottery Corporation operates lottery games in Canada on behalf of the Provincial Governments. It is owned jointly by the five provincial lottery commissions: Atlantic (jurisdictions of Newfoundland and Labrador, Nova Scotia, as well as Prince Edward Island and New Brunswick); British Columbia Lottery Corporation; Ontario Lottery and Gaming Corporation, Lotto-Quebec, and; Western Canada Lottery Corporation (Manitoba, Saskatchewan, Alberta, Northwest Territories and the Yukon). Each provincial organisation is responsible for marketing the national games within its own jurisdiction, and revenues are returned to each province in proportion to generated sales. The province of Saskatchewan has a Lotteries Trust Fund for Sport, Culture and Recreation, established as Sask Sport Inc., pursuant to the Interprovincial Lotteries Act (1974). Lottery funding supports a grants system to eligible, non-profit volunteer organisations in the areas of sport, culture and recreation. The Trust distributes funds to more than 1200 organisations, as well as support for nine Sport, Culture and Recreation Districts within the province.
For example, the lottery-funded system is delivered to the people of Saskatchewan through three independent community partners; Sask Sport, Inc., Saskatchewan Parks and Recreation Association Inc. and SaskCulture, Inc.; collectively they represent hundreds of community organisations and ensure that lottery funds benefit communities. In 2019/20 grants to beneficiary organisations in Saskatchewan (across all three sectors) were CAD$55 million from total lottery proceeds of approximately CAD$61.8 million. The proportion of lottery funding going to ‘sport’ (as separate from culture and recreation activities) was CAD$28.7 million [source: Saskatchewan Lotteries Trust Fund, 2019-20 Progress Report].
Sask Sport funds a wide range of grant programs, awards and scholarships, including: Kidsport, Aboriginal Sport Development, Saskatchewan Sport Awards, grant applications from over 90 sport organisations, 9 district associations, sport equipment grants program, and an individual athlete scholarship program.
In the Canadian province of Alberta, the Alberta Sport Connection (formerly the Alberta Sport, Recreation, Parks & Wildlife Foundation) is the organisation distributing Lottery funds. They fund (similar to Sask Sport) a wide range of programs and organisations within their jurisdiction.
- The end doesn’t always justify the means: Public support for funding amateur sports and recreation using Alberta Lottery fund monies (abstract), Walker G, Mason D, Johnson B and Whitehead J, World Leisure Journal, Volume 50(4), pp.285-294, (2008). This study examines the public's willingness to fund amateur sports and recreation using gambling monies in the province of Alberta, Canada. The study also tried to determine whether Albertans believe that current funding levels were sufficient, deficient, or excessive. A survey (N=759) of Albertans showed that slightly more than half the respondents supported the use of gambling monies for sport and recreation. Responses varied by sex, age, education, religious and moral beliefs.
The British Columbia Lottery Corporation and the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games launched a suite of lottery games in 2006 to raise money for the Games and amateur sport in B.C. Actual revenue did not meet projections and the lottery was discontinued after one year.
The Canadian Government also ran a sports lottery in the years preceding the 1976 Montreal Olympic Games that contributed CAD$235 million toward the Games and CAD$25 million to amateur sports in Canada [source: Montreal 1976: Legacy of the Olympic Games in Montreal, Guay M, Association Olympique Canadienne, (1996)].
In 1989 a sports lottery was introduced in China for the purpose of funding the 11th Asian Games. In 1994 the Sports Lottery Management Centre, under the State Physical Culture Administration, was established with branch offices in provinces and cities. Other than the two government sponsored lotteries (Welfare Lottery and Sports Lottery), all other forms of gambling are illegal in mainland China. A nationwide lottery-selling network was established and the sports lottery was brought under standardized management. In recent years the sports lottery has taken on a more general role in raising funds. In 2012 the Sports Lottery generated ¥110.5 billion in profit (note: 5¥ (Yuan) ≈ 1 Australian Dollar). The money is used for such things as the Nationwide Physical Fitness Program, to help China's western regions and less developed regions fund sports programs and supplement the budgets of major sports events.
- Audit finds National Lottery System is riddled with problems, Yun X, Caixin, (7 August 2015). Billions of yuan raised by China's state-run lotteries has been misused over the past three years, the national auditor says, shedding light on loose supervision and a lack of transparency regarding the massive system. Gambling is strictly banned in China, but the government runs one of the largest lotteries in the world. China has two official lottery systems under the oversight of the Ministry of Finance. One raises funds to support social welfare projects and is organised by the Ministry of Civil Affairs, while the other is operated by the General Administration of Sport to raise fund for the development of sports. Lottery tickets are sold at authorised vendors across the country.
- China Sports Lottery Administration Centre, Lottery Insider, (accessed 14 September 2020).
- Sports Betting and Lottery Legal in China, OnlineBetting.com, (accessed 14 September 2020).
- Sports Lottery, China Through a Lens, China Internet Information Center (accessed 14 September 2020).
National Lotteries in European countries are closely connected to funding ‘good causes’, particularly sport. Twenty-four of the 28 European Union nations currently conduct national lotteries where some of the proceeds are dedicated to funding sport at elite and/or participation levels. The available data does not indicate exactly how each country distributes its contribution to sport (i.e. athlete or program support, facilities, etc.).
In absolute terms (2015 figures), there are five countries that made a substantial contribution to sport through lottery funding, they are: UK (€731 million), Germany (€400 million), France (€223 million), Finland (€150 million) and Poland (€148 million); this accounts for about 80% of all lottery contributions to sport in Europe. If the total payments per country are divided by population the ranking of the top five countries looks different; Cyprus (€33.5 per person), followed by Finland (€27.8), Denmark (€17.2), UK (€17.2) and Austria (€9.5). [Note: 1€ ~ £0.88 ~ $1.5 Australian dollar]
Employment figures from 2012 related to lottery contributions to ‘good causes’ had the effect of creating over 26,000 jobs; and economic ties with suppliers created almost 14,000 additional jobs. Hence, the employment multiplier takes the value of 1.5 which implies that every new job created through European member lottery payments to sport ensured additionally one-half of another job in Europe. From a country perspective one quarter of all jobs created in this manner were secured in the UK (principally stimulated by the 2012 London Olympic/Paralympic Games). The second-most sport related jobs are generated in Poland, followed by Germany, Finland and France.
- The impact of Lotteries as a funding source for European sport, Borrmann J, Fichtinger M, Grohall G, Helmenstein C, Kleissner A, Kerschbaum F Krabb P and Scholtes-Dash K, Sports Econ Austria, Institute of Sport Economics, Vienna (2015).This study addresses the question of whether lottery funding has contributed to the growth of sport, gross value added, and employment in the EU sports sector.
France was one of the first countries in Europe to provide Federal Government funding for sport. Government support for sports dates back to President de Gaulle’s Economic Plan of 1958, which made sport a central point for the revival of national pride. Policies were introduced to increase grassroots participation, as well as developing international excellence.
The French Government provides assistance to the sports sector principally through annual grants to the various sport Federations. There are four main objectives of Government funding to the sport sector: (1) grassroots growth and support; (2) performance sport support (3) health promotion through sport, and; (4) sports employment.
Exchequer funding is ‘topped up’ by a subsidy from the National Lottery. Of particular note within the French system is the emphasis on the Government’s employment objective. Much of the contribution made to sport funding from the National Lottery goes toward human resources. The Ministry directly employs some 1,571 sports coaches within the 89 Sports Federations.
The French Government owns a 72% stake in the National Lottery, ‘La Francaise des Jeux’. In 2007 (latest available figures) the Lottery contributed €236 million (approximately $354 million Australian) to sport; one-third at the grassroots level and two-thirds at the performance level.
- Study on the contribution of the gambling industry to the funding of sports in two member states – the UK and France, Sports Business, report prepared for the European Gambling and Betting Association (2008). This report compares the models used in France and the UK. The UK system is more ‘entrepreneurial’, while the French system has a strong emphasis on a State run system. Both countries use lottery funding in partial support of elite and participation sport through structured programs. This report provides an analysis of the similarities and differences in the two systems.
The German Sport Lottery, Deutsche Sportlotterie, was established in 2014-15 (replacing other lottery systems that contributed to sport) to improve the financial support provided to emerging and current German national level athletes. Unlike other national lotteries, the German Sport Lottery is solely dedicated to funding high performance sport athletes; not national sporting organisations. A projected breakdown of lottery revenue allocates about 30% as direct athlete support to supplement existing German Sports Aid Foundation (DSH), providing financial assistance to approximately 3,800 elite, emerging elite, and sub-elite athletes; 30% distributed as lottery prizes; 22% on lottery administration; and, 17% to government as a lottery tax.
The Japan Sport Council (JSC) receives funding through the Sports Promotion Lottery known as ‘Toto’. In 2012 the JSC distributed funds to 3,070 sports organisations and clubs.
Toto was introduced in 2001 for the purpose of creating a new source of funding for the maintenance and improvement of the sports environment in Japan. The profits from Toto are calculated by deducting payments to prize winners and lottery administration expenses; two-thirds of the profits are then put toward sports promotion activities, whilst the other third is paid to the national treasury. Sports promotion lottery income to the JSC for fiscal year 2019-20 was 1,000,479,000 Yen (note: 77 Yen ≈ 1 Australian Dollar).
- The impact of the national sports lottery and the FIFA World Cup on attendance, spectator motives and J-League marketing strategies (abstract), Funk D, Nakazawa M, Mahony D and Thrasher R, International Journal of Sports Marketing and Sponsorship, Volume 7, Issue 3 (2006). This paper examines the impact of the national sports lottery (Toto) on the J-League (Japan’s professional soccer league) during 2001, and the impact of staging the 2002 FIFA World Cup. The evidence suggests that hosting the FIFA World Cup provided greater long-term interest in the J-League than association with the Toto football lottery.
- Japan Sport Council brochure, 2019-2020
The National Lottery allocates about 6% of its profit to sport, half of this is used for sport infrastructure. Elite sport receives about 40% and ‘Sport for All’ about 10%. Funds are distributed through the National Olympic Committee (NOC) and National Sports Federations (NSF). The NOC/NSF has three primary sources of income – Government, National Lottery, and corporate partners. [source: NOC/NSF]
In 2015 the Dutch government contributed approximately €70 million and the National Lottery €50 million; corporate sponsorship contributed about €10 million. The largest source of funding for sport comes from local government in the form of infrastructure and on-going support to local organisations; this totals about €1 billion annually (note: 1 Euro ≈ 1.5 Australian Dollar).
New Zealand supports sport (in part) through national lottery proceeds. A variety of arts, cultural, sporting and community groups receive funding through the New Zealand Lotteries Commission. The Lottery Grants Board was set up by Parliament to benefit the community by distributing the profits from the games run by Lotto New Zealand. In 2019 the NZ Lottery Commission distributed a total of NZ$261 million. From this total NZ$54.8 million went to Sport New Zealand.
- Annual Report 1 July 2018-30 June 2019, Sport New Zealand, (2019)
- Annual Report 2018/19, Lotto New Zealand, (2019).
The National Lottery is managed by a government agency, the Korea Lottery Commission. It has the authority to issue, sell, and manage lottery products, but it entrusts private lottery companies with most of the operational details. The most recent public survey (2013) indicated that 65% of respondents felt the lottery system was good for the country. Priority areas for distributions of net revenue from the National Lottery are: housing subsidy for low-income groups, special welfare projects, disaster relief, welfare support to men of ‘national merit’ (retired military servicemen), and promotion of cultural/arts/sport.
The Korean Sports Promotion Foundation (KSPO) receives the benefits from two lottery products, Sport TOTO and Proto. Funds are allocated to national sports promotion programs (e.g. grassroots sports and physical activity), and used for the construction of sports infrastructure, such as recreational sports facilities, so that the whole nation can equally enjoy the benefits of sports participation. Since its establishment in 1989 to 2016, KSPO invested about 8749.3 billion KRW into sport. The National Sports Promotional Fund is the driving force of national sports development, accounting for 90.8% of governmental sports budgets in 2017 [source: KSPO].
The potential impact of lottery funding as a contributor to high performance sport is illustrated by the 'success' of Team Great Britain at the Olympic and Paralympic Games. During the period 1995 through 2016, significant increases in government funding to sport, as well as the introduction of a National Lottery (part of the proceeds going to sport) lifted the UK's Olympic and Paralympic results.
In the United Kingdom the Government, empowered by the National Lottery Act 1993, through the Department of Culture, Media and Sport, appoints and directs the Gambling Commission, which awards a licence to run the National Lottery. Camelot is the company holding the licence to operate the National Lottery until 2023.
Around 4% of total revenue is spent on operating costs; 28% distributed back to various sectors of the community (including sport); approximately 50% paid out in lottery prizes; 5% in sales commission to retailers; and 12% to the Government in Lottery Duty. There are 12 independent organisations representing arts, charities, education, the environment, health, heritage, sports, and voluntary organisations that act as distributors of lottery funding. The sport sector organisations include: UK Sport, Sport England, Sport Scotland, Sport Wales, and Sport Northern Ireland. Surveys indicate that more than 60% of the British population regularly plays the Lottery and more than 90% of the adult population has played the National Lottery at least once.
While the percentage of National Lottery distributions to each community sector (i.e. worthy causes) may vary from year-to-year, the long-term approximate distributions by sector are: heritage (20%), sport (17%), arts (16%), health education (15%), charities (12%), environment education (11%), and millennium projects (7%) [source: Department for Culture, Media, and Sport]. The UK Lottery also contributed almost £2.2 billion towards the costs of staging the 2012 Olympic and Paralympic Games in London.
UK Sport is one of 12 designated distributors of National Lottery proceeds. The National Lottery contributed about £337m (approximately $606 million Australian) to the ongoing funding of elite sport in the UK during the post-London Olympic quadrennial, 2013-2017. Since National Lottery funding became available to Olympic and Paralympic sports in 1997, British athletes have substantially improved their international standing, based upon medals won at Olympic and Paralympic Games [source: UK Sport, the National Lottery, funding partners].
In 2019-19 the National Lottery Distribution Fund accounts for sports bodies included: Sport England: £220.2 million; Sport Scotland: £28.7 million; Sport Wales: £15.9 million; Sport Northern Ireland: £9.2 million; UK Sport: £80.9 million; total: £355.2 million [source: National Lottery Distribution Fund Annual Report & Accounts, 2019-20, p45].
Criticism of the UK National Lottery is often grounded as a moral or ethical issue, with the view that a lottery may encourage underage or excessive gambling. The under-age gambling hypothesis has been tested in the UK, survey research conducted in 2001 showed that 47% of children in the UK between the ages of 12 and 15 years had gambled on National Lottery scratch cards and 40% on the main lottery draw; although sports betting in the UK remains illegal for persons under the age of 16 years. These figures did not substantially change in the years leading-up to the London Games, even though greater promotion of the National Lottery and its connection with supporting the London Olympics/Paralympics was in the public eye.
- Underage gambling in England and Wales, Research conducted by Ipsos MORI on behalf of the National Lottery Commission (2012). Rates of ‘under-age’ gambling have stabilised since 2008. The profile of children who have gambled is consistent with previous research, most notably; boys are more likely to gamble than girls. Children from single parent households and households where neither parent works are more likely to gamble, and children who perceive they are not doing well at school are also more likely to say they gamble than those who feel they are doing well academically.
In contrast to survey research that shows a stable gambling rate among UK children (which is illegal), the Parliament has continued to look at the social impacts of various forms of gambling and a continued debate on the pros and cons of gambling remains.
- Evidence to the House of Commons Select Committee on Culture, Media and Sport, The operation of the First National Lottery (2001). According to Dr Sue Fisher, of the Centre for Research into the Social Impact of Gambling at the University of Plymouth, children might be at risk to other forms of gambling following the introduction of the Lottery. Lottery gambling might make other gambling behaviours more attractive or accessible.
International
There are about 80 countries, worldwide, that have some type of National Lottery.
Further resources and reading
Articles
- The Idea of an Australian National Sports Lottery Has a Long – and Disappointing – History …but History has Proved No Impediment to Old Arguments in the Quest for the Non-government Dollar, Greg Hartung, Australian Sport Reflections, (14 February 2022). Governments and national sport organisations have for decades longed for a source of reliable funds independent of the federal budget. Since the 1970s there has been a mountain of history accumulated behind the lottery concept. It has always sounded so superficially simple, yet every effort to make it happen has fallen short. It remains as unattainable today as it was 50 years ago. But have we seen the last of it? Don’t bet on it.
- ASC boss John Wylie pushes 'responsible' lottery to fund Olympic success, Fairfax Media, The Sydney Morning Herald (28 November 2016). John Wylie insists a national online lottery to help rescue the nation's flagging Olympic fortunes would not fuel problem gambling. It would raise between $30 million and $50 million a year for elite and grass roots sport, which Wylie said was chronically underfunded.
- Australian Sports Commission pushes lottery to drive success. Jeffery N., The Australian/news.com.au (27 November 2015). Chairman, John Wylie AM, has publicly stated that he favours a National Sport Lottery system to help Australia keep pace with its international competitors. Establishment of a lottery system, similar to systems used in Britain, Germany, New Zealand, Japan and South Korea.
- Australian sports would benefit from national lottery funds. Le Grand C., The Australian (2 December 2016). During the past few weeks, the stark future confronting Australia’s Olympic sports has been laid bare. One by one, each sport has made its pitch: a detailed assessment of what went right and wrong in Rio, a best-guess forecast of what they may do in Tokyo, their plans for the next four years and the cost of those plans. One by one, the sports have been given the same message from those who hold the purse strings for Australian sport: there is little money now, there will be less tomorrow.
- Federal government sports lotto faces many more hurdles and much opposition. Stensholt J., The Australian Financial Review (23 July 2017). Work on the $50 million national sports lottery is moving quickly, with federal Sports Minister Greg Hunt understood to have met or spoken to the bosses of several gambling and broadcasting companies in recent weeks.
- Lottery on $100m fast-track. Le Grand C., The Australian (22 May 2017). Australia's Tokyo Olympics campaign will benefit from $100 million in projected new funding as the federal government reveals plans to establish a sports lottery two years before the 2020 opening ceremony to arrest our national decline in world sport.
- Magpie Millions: new community initiative, Collingwood Football Club, (3 February 2017). Magpie Millions is a first of its kind in Australia, a community-focussed secondary lottery product created to return all profits received by Collingwood to the many welfare programs, partnerships and grass roots activities the club is committed to. Each week, Magpie Millions players can wager on their pick of numbers of six of their favourite current Collingwood players and the number of a club legend for the opportunity to win $2 million. The weekly draw is conducted under the guidelines and regulations of the Northern Territory Gaming Commission. Each entry bet costs $2.50 and is restricted to people over the age of 18, a weekly limit of $20 is set for players.
- The Collingwood Football Club ceased operation of the Magpie Millions lottery on 1 July 2018 [source: Collingwood and MRC finalise gaming and venue deal, Collingwood Football Club, (17 July 2018)].
- National lottery scheme needed to boost Australia’s Olympic funding before Tokyo 2020. Ralph, J., Herald Sun (18 August 2016). Australia's only hopes of an increase in Olympic funding before Tokyo 2020 lie in a national lottery scheme being aggressively pushed by the Australian Sports Commission.
- Olympic fund still a lottery, with state sports ministers off track. Hutchinson, S., The Australian (21 August 2017). A $100 million plan to fast-track a national sports lottery to support the Australian Olympic team in Tokyo is under threat, as state governments say they need more time for consultation.
- Queensland rejects sports lottery idea, Le Grand, C., The Australian (22 August 2017). Queensland has rejected a federal government proposal to boost funding for elite athletes through a British-style national sports lottery, warning it would further embed gambling in sport.
- 'Very big thought bubble' on lotteries risks $1.6b in funding. Toscano, N., The Sydney Morning Herald (27 July 2017). A proposed $50 million national sports lottery to bankroll Australian athletes has been rebuked by newsagents as a "very big thought bubble" that could erode funding to hospitals, schools and charities.
Reports
Australian government reports
- Australian Gambling Statistics 1992-93 to 2017-18, 35th edition, Queensland Government, Statistician’s Office and Queensland Treasury (December 2019). This publication comprises statistics on turnover, expenditure, and government revenue from different gambling activities conducted in Australian states and territories. Further information, previous editions and summary tables
- Sports funding: federal balancing act, Jolly R, Australian Government, Parliamentary Library report, (June 2013). This report traces the history of Federal Government involvement in sport from federation through the Howard government years. Prior to the Whitlam Government, only minor government support existed for Olympic Games and Commonwealth Games (formerly the Empire Games). Key events during the late 1970’s (i.e. principally Australia’s poor result at the 1976 Montreal Olympic Games) and during the 80’s and 90’s included the establishment of the Australian Institute of Sport (1981) and the Australian Sports Commission (1985) and the seven year lead-up (1993-2000) to hosting the 2000 Olympic Games in Sydney.
International reports
- 2007 European Commission (EC) white paper on sport, European Union, (2007). This report provides an overall case for government support of sport for health, social, and economic reasons and invites member states to reflect upon how best to maintain and develop sustainable financing models for long-term support of sporting organisations. (item 3.2)
- The different funding models for grassroot sports in the EU, Montel J, Waelbroeck-Rocha E, European Union, (2010). Different financing models exist across EU member states. The 24 EU nations having a national lottery distribute revenue to sport differently. For example: Finland and Greece fund the Sport’s Ministry; Austria, Cyprus, Denmark, UK, and Estonia fund independent bodies (such as UK Sport); France, Poland, Slovenia and Lithuania use a dedicated sports fund; the Netherlands funds the umbrella organisation for Olympic sports; the Czech Republic funds sports federations directly; and other nations have unique systems that may include professional sports, Olympic sports and grassroots participation.
- Is lottery gambling addictive?, Guryan J and Schettini-Kearney M, Working Paper 14742, National Bureau of Economic Research, (2009). Data from the Texas State Lottery (USA) suggests that after 6 months, roughly half of the initial increase in lottery consumption is maintained. After 18 months, roughly 40 percent of the initial shock persists, although estimates become less precise. These estimates provide an upper bound on the degree of addictiveness in lottery gambling.
Research
Access to resources
Where possible, direct links to full-text and online resources are provided. However, where links are not available, you may be able to access documents directly by searching our licenced full-text databases (note: user access restrictions apply). Alternatively, you can ask your institutional, university, or local library for assistance—or purchase documents directly from the publisher. You may also find the information you’re seeking by searching Google Scholar.
SPLISS
The SPLISS project is an international research consortium that gathers and analyses data on the elite sport policies of 15 countries – Australia, Belgium (separated into Flanders and Wallonia regions), Brazil, Canada, Denmark, Estonia, France, Finland, Japan, Netherlands, Northern Ireland, Portugal, South Korea, Spain, and Switzerland. The focus of this research is on the relationships between policies and international sporting success and accordingly, this offers insights into which factors might shape elite sport development pathways and sporting success on the international stage. In Chapter 5 of the latest SPLISS report ‘Financial Support’ is broken down into government (treasury), lottery, and ‘other’ (i.e. a combination of sponsorship and commercial) sources.
Of the 15 nations studied in the SPLISS project, only Australia had no lottery funding sources included (note: data regarding lottery funding for elite sport in France and Spain was not available, and therefore, not reported). South Korea received 86% of its elite sport funding from lottery sources, followed by Denmark (78%), Portugal (65%), Brazil (53%), and Switzerland (41%), all other nations reported lottery sources at about a quarter, or less, of their total national funding of elite sport. The SPLISS research has identified and highlighted the importance of government policies that provide financial assistance to elite sport and thus, international success. Although conclusions regarding the intra-governmental sources of elite sport funding are not drawn.
SPLISS and other research clearly shows that government support for sport, through policies and direct (i.e. treasury) funding, are primary drivers of sport system success.
- Successful Elite Sport Policies: An international comparison of the Sport Policy factors leading to international sporting success (SPLISS 2.0) in 15 nations, De Bosscher V, Shibli S, Westerbeek H and Bottenburg M, SPLISS, (2015). One of the key discussion points about elite sport competition is to what extent medals can be “bought”. There is a strong positive relationship between the absolute amount of elite sport funding invested by nations and their success. The countries that invest most in elite sport, with government (i.e. treasury) or lottery funding over 100 million euros a year are also the most successful nations in summer/winter Olympic sports. Nation by nation diagnostics shows that Australia, France, Japan and the Netherlands can be identified as the most efficient nations in summer sports given their investment in elite sport. Whilst ‘money in equals medals out’ it does not follow that ‘more money in equals more medals’. Nations suffering from diminishing returns on investment were Australia, France, Finland and Belgium whose expenditures increased over a ten year period between 2001 and 2011, but market share decreased in relative terms, in both in summer and winter sports. Countries such as Japan and Brazil are investing heavily and they are becoming more successful in summer sports, taking market share from the established nations. [held by Clearinghouse for Sport: GV713.B67 2015]
Other
- Gambling as a Base for Hypothecated Taxation: The UK’s National Lottery and Electronic Gaming Machines in Queensland Australia (PDF - 90 KB), Pickernell D, Brown K, Worthington A and Crawford M, Public Money and Management, Volume 24, Number 3 (2004). Legal forms of gambling represent a source of tax revenue for many governments. It is also promoted that proceeds from gambling can be spent on ‘good causes’ to benefit the community. Such spending is often seen as ‘additional’ to existing government activity. Investment in ‘good causes’ can be diverted into education, health, social and economic development; potentially substituting for taxation raised elsewhere in the economy. This study utilises two cases: the UK’s National Lottery and the impact of Electronic Gaming Machines (i.e. poker machines) in a low socio-economic region of Queensland to illustrate that, despite different contexts, the general distribution of funds from gambling has a disproportionate negative impact on low socio-economic segments of the population.
- Gambling Taxation in Australia, Smith J, Discussion Paper Number 16, School of Economics and Politics, Australian National University, (1998). The ethics, economics and fairness of gambling taxes presents a number of challenges to State Governments. In 1996 State tax revenue from gambling was $3.5 billion, or approximately 10% of general tax revenue. However, up to a third of Australia’s gambling taxes come from about 200,000 persons, with a disproportionately high number from low income households. Offsetting the regressive burden of gambling tax is the ‘gambling for good purpose’ approach adopted by government, that tax revenue can be invested in schools, public health and other worthy projects. [The Clearinghouse for Sport holds a copy of this document.]
- Lottery Grants: Their impact in our community, Lotteries West, (1997). The Lotteries Commission of Western Australia uses the profits of lottery gaming to support a range of community projects, events and organisations. This report is the end product of a project designed to measure the social and economic impact of Lotteries West funded programs. Case studies and focus groups were used to collect information for this study. Grants were found to contribute significantly to improving the quality of service delivery of not-for-profit organisations; generating positive social relationships; and supporting community life. [held by Clearinghouse for Sport: S HG6147.A2.L66]
- The response of voluntary sports clubs to Sport England’s Lottery funding: cases of compliance, change and resistance, Garrett R, Managing Leisure, Volume 9, pp.13-29, (2004). The effectiveness of Lottery funding distributed by Sport England should not be measured simply by its amount. The success of funding allocated at the grass roots level depends upon the willingness, determination, honesty and ability of the voluntary sports clubs that receive funding to adhere to the funding conditions. This paper provides evidence to suggest that whilst voluntary sports clubs are positive about receiving their Lottery funding from Sport England, their willingness and ability to fulfil their funding conditions are more varied.
Clearinghouse videos
Licencing restrictions apply to some resources.
All Clearinghouse members
'Australian' members only
'High Performance' members only
Restricted access
Various restrictions
- London's Olympic Experience, Hon Hugh Robertson, MP, British Minister of State for Sport and Tourism, Smart Talk Video Series, Australian Institute of Sport (8 May 2013). Minister Robertson talks about the success of the 2012 London Olympic Games. As part of this discussion he highlights improvements in Olympic performances made by the UK Team, and credits National Lottery funding to sport as one reason for this improvement.
Reviewed by: Australasian Sport Information Network
Last updated: 01 January 2019
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