The Co-op is taking on the National Lottery with the launch of its own scratchcards, which will give as much as four times more to good causes. The member-owned business says a minimum of 20% from the sale of each of its own-brand cards will go to “local good causes”. That compares with as little as 5% for some National Lottery cards – though the average is 10% (the range is between 5% and 16%).
However, the move could be controversial. Scratchcards are now officially the UK’s second most popular form of gambling after the National Lottery draws, so some may feel uncomfortable with the Co-op – which is well known for its ethical stance – entering this market.
Meanwhile, Guardian Money can also reveal that with some of the National Lottery cards on sale right now, punters may not realise that most or even all of the advertised jackpots have already been scooped by other people.
The Co-op’s move shines a spotlight on Britain’s booming scratchcard sector. The National Lottery has an extraordinary 42 different scratchcard games, ranging from those costing £1 a time such as the “Monopoly” card with a top prize of £100,000, to £10 games such as the “£250 Million Cash Spectacular” card, which boasts eight top prizes of £3m.
A number of other companies and organisations sell their own scratchcards, from airlines such as Ryanair to charities like the Royal British Legion. However, people don’t even need to leave their homes to satisfy their fix: they can now be bought from online betting companies such as Lottoland.
In December the government’s spending watchdog, the National Audit Office, said there had been “a trend of rapidly increasing sales of scratchcards” during the past few years, which coincided with a drop-off in the popularity of draw-based games. That was backed up by the Gambling Commission, which found that in 2016, 12% of Brits had bought at least one scratchcard during the previous four weeks – up from about 9% in 2015 (the 2017 data is due out later this month).
So perhaps it’s no surprise that a major retailer like the Co-op wants a slice of the action. A spokeswoman says its cards, which are being rolled out across England, Scotland and Wales this month, are set to raise millions of pounds for “causes close to Co-op and our members”, from playgroups and luncheon clubs to hospices and animal sanctuaries.
The cards will cost £1 or £2, and the chance of winning a prize will be between one in three and one in 4.5. That appears broadly comparable to the National Lottery cards. Money randomly looked at 10 of them, and the chances ranged from one in 3.45 to one in 4.67. However, unlike the Camelot-run cards, there are no £!m-plus jackpots here – the Co-op’s top prize is £25,000.
The scratchcard surge could be viewed as bad news. The National Lottery’s cards tend to give a significantly smaller amount than its draw-based games – about 28p of every £1 spent in a shop on the National Lottery draws goes to good causes, which is almost three times the typical figure for its scratchcards.
Also, do scratchcards encourage problem gambling? If you go to the website of information and advice organisation GamCare and take a look at the forums, you will see a number of posts from people talking about scratchcard addiction. Under a January 2017 post headlined “My mum is addicted to scratchcards”, one site user said his/her mother, in her early 60s, had progressed from buying about one card a week to about 30 or more a day. The poster said the woman was now emptying all the bins in her house every day in order to hide how many cards she had been buying, and added: “I’m really so worried. I just found 30 new £3 scratchcards in her bag, and I know that she will most likely go out and buy more tonight … I really hate that there is no limit to how much one person can buy.” Another poster, who has been undergoing counselling for a gambling addiction, said he/she had been successfully avoiding their “usual bad habits”, but the only problem they had been having recently “is the urge to buy scratchcards”. That said, when it comes to the links with problem gambling, scratchcards – while “riskier” than the National Lottery draws – are not nearly as bad as, say, spread betting or playing poker in a pub or club, according to the Gambling Commission research.
Asked about the ethical aspect, the Co-op says: “These scratchcards will be sold in a socially responsible way, and we support responsible gambling through GambleAware, as with all the National Lottery cards sold at Co-op.”
Camelot says that last year, sales of National Lottery instant games were £2.9bn, and that it is the higher prize payouts on these games that give them their appeal, meaning higher sales and therefore greater returns to the good causes in absolute terms.
“It’s also worth pointing out that our costs on scratchcards in terms of manufacturing and distribution are comparatively high, so that also needs to be factored in. Ultimately, these games are impulse products … The sales they bring in are over and above those that we get from our typical draw-based games players. So it’s not relevant to focus solely on the percentages – it’s the additional money going to good causes that’s important.”
Source: The Guardian