SMS for lottery – beware the pitfalls
Great news, SMS is now available as a means to enter a society lottery. This has been a long awaited facility and those societies with lotteries are probably celebrating.
But wait… hold off the champagne for a moment!
Without wishing to be a party pooper, there are probably a few things you should consider before going full steam ahead with your lottery SMS campaign.
Below is a basic flow diagram showing the expected flow of information for an SMS player:
Seems fairly straight forward doesn’t it? But look more closely at the role of the Text Service Provider (TSP). Arguably, they are carrying out some of the overall management of the lottery. They will not only be issuing tickets, but also are central to the banking arrangements, as well as carrying out some customer service activities which may require taking over various social responsibility obligations. They may therefore need to be licensed as an ELM to undertake this role.
Maintaining focus on the role of the TSP, note too that this includes providing software to manage information and allocate it to the correct lottery. In addition they manage the STOP/SKIP facility, “print” and send out tickets, plus report to the relevant ELM/Society. To do this, the TSP will surely need to record and maintain records of gambling transactions. The implication here is that the software will need to be adapted for gaming purposes.
In March 2015, it became a requirement that all remote operators (including ELMs) only use gambling software manufactured, supplied, installed or adapted by the holder of a gambling software licence. Gambling Commission guidance “What is Gambling Software?” published in 2014 says the following:
“…the purpose of the gambling software licence is to ensure that those manufacturing software which can impact on the fairness of remote gambling, do so in a regulated environment. At its core, this generally means the software that accepts and records gambling transactions, determines the results, calculates and allocates any wins to the customer’s account…”
There is potential that a TSP can impact the fairness of remote gambling if any of the reports to ELMs/societies are not accurate.
Overall, it seems unlikely that the TSP can provide the service without adapting its software for gambling and therefore it will need to be licensed with a remote gambling software licence.
Not the best news, so what can you do? My first suggestion would be to speak with your TSP – they may already have the necessary licences or be working with a licensed remote lottery software supplier. TSPs and Aggregators all belong to the Association for Interactive Media and Micropayments and this is another good resource. If you’re a licensed society using an ELM, discuss this with them. I have also asked the Gambling Commission for their thoughts on this topic. Please view the Gambling Commission response.
Above all, don’t give up! This is unexplored territory and there are always teething troubles, but there is nothing that can’t eventually be overcome. The Gambling Commission has reported record levels of funds raised by society lotteries and SMS is likely to further increase this valuable source of income.
Tamsin Mitchell, Business Improvement Lead at the Institute of Fundraising
Compiled with the help of Anna Mathias of WoodsWhur. Anna is an expert in UK Society Lottery Law