A series of my blogs on streamlining, standardising and unifying requirements for the definition of gambling market participants, where I tried to explain with examples why it is necessary to return lotteries from "free-floating" to the gambling sector and regulate their activities taking into account that lotteries are gambling, aroused some interest among readers. I received a lot of inquiries: why should lotteries be considered gambling? So it is worth returning to this topic again.
It would be appropriate to consider the case of the UK, as the British regulator gives a clear definition of what a lottery is and defines it as a type of gambling consisting of three main elements:
- payment is required to play the game;
- one or more awards are given for winning;
- these awards are distributed randomly.
In addition, the law divides lotteries into two types: simple and complex. A simple lottery involves a participation fee and one or more prizes, the distribution of which among the participants of the game is a completely random process. A complex lottery is a multi-stage game where the main components are:
- participation fee;
- distribution of winnings not among all participants, but by classes or categories;
- The distribution of winnings is carried out through a series of processes;
- Only the first of these processes relies entirely on chance.
As for the definition of randomness, the British law does not understand it in the same way as we are used to! Randomness in the distribution of lottery prizes is considered to be the absence of artificial obstacles to winning for any participant of the game.
In general, the legislation of the vast majority of countries defines lotteries as gambling for several key reasons, among which there are five basic ones.
1. The presence of an element of chance. In lotteries, as well as other gambling games, the results (winnings) depend on chance, i.e. players cannot influence the outcome, and the outcome itself is unpredictable and uncertain in advance.
2. The presence of both winnings and risks of losing money for players. Participation in a lottery involves a risk of losing money (ticket price) with a variable possibility (chance) of winning. This creates a gambling element, as players play because they hope to win and neglect the risk of losing money.
3. Government regulation. Many countries regulate lotteries similarly to other gambling activities to ensure consumer protection and prevent abuse. This includes licensing operators, monitoring draws, and ensuring transparency.
4. Social aspect. Lotteries are often used to fund social projects or charitable initiatives, which also puts them on a par with other forms of gambling that can have social impact.
5. Psychological factors. Participation in the lottery can evoke strong emotions, such as hope and expectation, which is also typical for gambling.
Therefore, due to these factors, lotteries are classified as gambling, which requires appropriate regulation and control by the state.
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