NORTH YORKSHIRE COUNCIL

Executive Member

9 December 2025

 

The future operations of the former Harrogate District Local Authority run community lottery

 

Report of the Assistant Chief Executive Rachel Joyce

 

1.0       PURPOSE OF REPORT

1.1       To agree on the future of the pre-existing community lottery, ‘The Local Lotto’, that is established in the former Harrogate District and now run by North Yorkshire Council (NYC).

 

 

2.0       SUMMARY

2.1       NYC has reviewed the future viability of The Local Lotto, a local authority run community lottery originally established by Harrogate Borough Council (HBC) in 2018 to support voluntary, community and social enterprise (VCSE) organisations.  Over seven years, the scheme has raised over £376,000 for local good causes across the former Harrogate district (November 2025).

 

2.2       Following local government reorganisation, the Communities Team- Localities Service, inherited the management of the lottery.  A comprehensive review has concluded that continuing or expanding the scheme is not viable due to:

 

·      Resource demands: Significant human and administrative input is required, including compliance with Gambling Commission regulations, and financial in that the council does not generate any income to cover any the ongoing operational costs.

·      Limited financial return: Most causes generate modest income (under £500/year), with only a few achieving higher returns.

·      Low engagement:Survey responses show limited promotion and reliance on the platform, with only 26% of causes responding and reporting minimal income from the lottery.

·      Alternative funding options: Other grant schemes (e.g. Inspire Fund, Member Locality Budgets, Two Ridings Community Foundation) offer more efficient and scalable support.

 

2.3       The current contract with the External Lottery Manager (ELM) (Gatherwell Ltd) ends in May 2026.  A full procurement exercise would be required to continue, but this is not recommended due to cost, complexity and diminishing returns to the council.

 

3.0       BACKGROUND        

3.1       On the 13 December 2017 Harrogate Borough Council approved the establishment of a local authority run community lottery to support the local voluntary and community sector across the Harrogate District.  This would provide a free online fund-raising platform to the sector to assist them in generating funds and to reduce the long-term reliance on the Borough Council for grant funding.  After 12 months of operation the council’s annual community grant scheme (£30k) was ceased and taken as a saving.

 

3.2       In order to operate the lottery the council applied for a Remote Operator Licence (Internet and telephone) from the Gambling Commission. As part of this process, it provided assurance that it understood its responsibilities to meet the licensing objectives as set out in the Gambling Act 2005 including adopting relevant operational policies and safeguards.

 

3.3       An ELM was appointed through a tender process to carry-out all the back-office draw management, regulatory support, operator platform, customer support, performance management, financial payments and marketing and communications.  Gatherwell Limited have been the provider since inception.

 

3.4       In July 2018, The Local Lotto for the Harrogate District was launched.  Over the last seven years it has become a source of regular income in varying degrees to the VCSE organisations across the former Harrogate District area who have signed up to use the platform.

 

3.5       The existing model is based on a £1 ticket; the council does not take any income from the ticket sales. 10p from every ticket sale goes into the Community Fund- The Local Fund, this is referred to as operator income.  Some local authority community lotteries keep this income themselves to cover operating costs, however, the former HBC decided to donate this into the community fund so there was more funding for the VCSE to apply for annually.

 

3.6       A player can either chose a specific cause to support (ticket type 2) or they can buy a community fund ticket- The Local Fund (ticket type 1), of which the proceeds go into the annual open competitive grants scheme.

 

 

Ticket Type 1

Community Fund -THE LOCAL FUND

(no specific cause selected)

Ticket Type 2

Specific good cause selected

 

% allocation

£ allocation per ticket

% allocation

£ allocation per ticket

Prize *1

20%

20p

20%

20p

Specific good cause

-

-

50%

50p

Good cause grants fund

60%

60p

10%

10p

Admin *2

17%

17p

17%

17p

VAT

3%

3p

3%

3p

TOTAL

100%

£1

100%

£1

 

            *1 The prize pot allocation per ticket also includes a prize insurance cost for a big win

*2 Gatherwell, the External Lottery Manager, take 17p in every £1 ticket sold to cover their admin costs.  We do not pay any other costs to them.

 

3.7       The lottery currently has 122 voluntary and community sector organisations registered to use the platform to raise funds for their cause.  Current performance shows that The Local Lotto is on track to raise £53,000 for the local causes over 12 months if all players continue to support their chosen cause (November 2025). This figure fluctuates however, like any lottery there are peaks and troughs in ticket sales as players come and go. Over £376,000 has been raised for the sector over the seven years of operation. 

 

3.8       Around £14-15k of the total ticket sales income annually is generated for The Local Fund (community fund).  This fund is managed by Two Ridings Community Foundation alongside other philanthropic giving.  The latest Local Fund impact report provides the narrative as to how the proceeds have been spent and outcomes achieved.

 

4.0       THE VIABILITY OF A NORTH YORKSHIRE WIDE LOCAL AUTHORITY RUN COMMUNITY LOTTERY

4.1       After much consideration it has been concluded that an online community lottery would not be viable to roll out across North Yorkshire by NYC.  Whilst the concept of providing a platform to the VCSE so that they can generate income for themselves and reduce the expectations on the council to provide funds in the future is valid, the realities of managing and resourcing a platform to do this cannot be underestimated across a large geographical area.  Both financial and human considerations were at the forefront of this conclusion alongside the fact that this is not a priority piece of work that can evidentially warrant resource input from any of the support teams that would need to be involved in its establishment (Communities Team, Procurement, Legal, Communications & Marketing, Finance).  The additional resource the Communities Team would need to allocate to establish it would not represent value for money for the annual income it may generate.

 

4.2       In reaching this difficult conclusion several influencing factors have been considered:

·         It is estimated that the amount of annual income generated across North Yorkshire would only increase by around approximately three times the amount already generated through the former Harrogate District scheme based on population numbers and the profile of the communities (circa £120k per year).  The income generated by the individual causes alone is not relative to the amount of work that goes in to manage and promote the ticket sales with a current maximum of around £1,500 a year being generated by a top seller ticket cause.  Where a cause has a North Yorkshire wide remit this would increase but those causes tend to be the larger service-based providers that have alternative income methods anyway.

·         A new gambling licence would need to be applied for.  This can take up to four months once submitted to the Gambling Commission, however in advance of this there would need to be the relevant supporting policies revised and adopted by NYC to cover the operating area of North Yorkshire, which could take up to a year to get in place.  There is also ongoing licence holder training and liabilities held by the two senior officers who fulfil this role.

·         There are various other small grant funding opportunities that cover North Yorkshire that groups could apply for and cover what they are currently raising/could raise in income through a community lottery over the year.  This includes the NYC Inspire grant fund that provides small grants of up to £1,000 for grass roots groups.  The annual Inspire budget is more than what would be generated through the year in income and requires less resource to administer.  There are also the Member Locality Budgets and other community based small grants such as the Heart of Yorkshire funding in the Selby area and other local charitable foundations, or the Two Ridings Community Foundation small grant fund that covers North Yorkshire.

·         Considerable work would need to be done to establish a new community lottery as being an independent fundraising platform for the VCSE.  There would then need to be ongoing resource to manage the provision including the regular admin and reporting requirements. There may be scepticism that the council is benefiting financially from it which has the potential to impact on the player support and development of the opportunity. The lottery needs to be locally driven by a trusted organisation to ensure its full income potential. 

 

5.0       THE FUTURE VIABILITY OF THE EXISTING LOCAL LOTTO FOR THE HARROGATE DISTRICT

5.1       The former Harrogate District scheme, The Local Lotto, has been reviewed so that a decision can be made regarding its future viability.  The pre-existing Local Lotto operational provision and platform is currently provided through the contracted ELM, Gatherwell Limited.  This provision includes all the draw management, the hosting platform, financial management, provision of promotional assets, monthly super draw prizes and customer support to the players and causes.

 

5.2       The council carries out regular weekly admin tasks, local communications to aid recruitment of players and causes, governance checks, monthly financial payment approvals and regulatory reporting requirements. 

5.3       The existing contract comes to an end May 2026 with no provision to extend any further. A full procurement exercise would be required to continue the community lottery provision post May 2026 and following the outcome of this, potentially a new scheme would need to be established should the ELM provider change.  The procurement would take around nine months to complete, six months set up time to re-recruit causes and players plus a budget to cover any set up costs. This would need to be managed alongside the shutdown of the existing scheme.  The existing supporter base and cause membership data can’t be transferred to a new provider platform due to GDPR rules and regulations. 

5.4       The annual amount of income generated by the existing causes using the Local Lotto for the Harrogate District has been reviewed alongside cause user survey feedback that was received following engagement about the future of the platform.  This included questions around how proactive the causes are in selling tickets to generate income, maximising the benefit of the free system and what percentage of the income raised through the Lotto contributes to their overall fundraising income total.

 

5.5       Having looked at the top 20 ticket sellers, these causes are on average generating between £490 and £1,500 a year if they maintain their current supporter base. Ticket sales fluctuate, and more income is generated on weekends when there is a Super Draw which is an additional national prize draw of a larger valued prize once every month across all the Gatherwell managed lotteries (prizes provided by Gatherwell).

 

Overall ticket overview

 

Number of tickets (18.11.25)

Number of causes

Estimated annual income

0

22

£0

1-20 tickets

71

£26-£520

21-30 tickets

14

£546-£780

31-40 tickets

5

£806-£1,040

41-50 tickets

4

£1,066-£1300

51+

5

£1,326+

349 tickets- *The Local Fund (community pot)

1

£6,700

 

*The Local Fund (community pot) generates the highest income; the above table reflects the ticket sales for The Local Fund as a chosen cause (50ps) and does not include the operator income (10ps).

 

5.6       To understand what impact The Local Lotto has on overall fundraising income, all 122 causes were contacted earlier in the year and asked to complete a short questionnaire that would help to understand how essential the income generated from The Local Lotto was and what other fundraising methods they were using.  This would identify those causes that use the lotto as a primary income source.  Questions around promotion of the lotto to generate ticket sales were also asked to get an idea as to whether the system was being used efficiently and if it was valued as a resource by the sector/causes.

5.7       The summary of findings showed:

·         32 responses out of a possible 122 were received despite various completion requests (26%)

·         24 respondents (75%) stated that they generate less than 20% of their overall fundraising income from the Lotto income

·         22 respondents 69% stated they only did ad hoc promotion and seven respondents 22% stated they did no promotion of the Lotto to generate income via ticket sales.

5.8       To understand the profile of all the causes using the Lotto platform currently they have been categorised into thematic groups and place localities.

 

Theme

Number of causes

Support services

32

Sports

24

Culture

21

Children and young people

15

Floral and green areas

8

Community hub and village halls

7

PTA

5

Health

3

Library

2

Animals

2

Other

3

Total

122

 

5.9       A high proportion of the causes are providing support services, they are often larger well-established organisations with some paid staff who will have alternative primary income sources that they rely on.

Current causes signed up and using the Lotto by town locality

 

Area

Number of causes

District wide

26

Harrogate *

59

Knaresborough

8

Ripon

13

Boroughbridge

4

Masham

1

Nidderdale

11

Total causes signed up (November 2025)

122

 

* One cause covers Harrogate and Ripon but has been included in Harrogate figures as core service is in Harrogate

 

5.10     Over half of the causes are based in Harrogate town which is not surprising given the population and profile of the town.

 

5.11     After looking at the variables several conclusions can be drawn:

 

·         Whilst appreciating it is not always considered appropriate to promote playing The Local Lotto, many of the signed-up causes do have wide reach but are not taking advantage of having access to the platform.  This includes some of the larger established ‘well known’ charities and groups across the district.  They can generate more income from other fund-raising methods, they tend to use the Lotto to capture support from the ‘by chance’ supporters who see them as a cause option on the Lotto website.  So no or minimal effort goes into promoting the support opportunity.

·         The smaller grass roots causes using the platform are run solely by volunteers and they don’t have the capacity or experience to do regular communications to their users to generate ticket sales.  Gatherwell introduced regular 15-minute lunch and learn sessions to help groups like this get the most out of the platform but there has been minimal take up from the signed-up causes to date.

·         When looking at the annual income generated and the amount that contributes to the causes overall annual fund-raising target, the Lotto is only contributing to a small proportion of overall income (less than 20%).  Only two causes stated that the income contributed 75-100% of their income and when looking at the cause types one must have completed the survey in error as they are a substantial charity with considerable annual income.

·         There are clearly other income streams and fundraising methods in use such as regular raffles, 100 clubs, community events, sponsorships, street collections as well as local grants for example the Knabbs Ridge Wind Farm Community Fund, Nidd Plus Community Fund, Ripon City Council community grants, The Local Fund as well as those administered by NYC.  

 

5.12     When considering all the above and factoring the human resource that continues to support the operational side of The Local Lotto from NYC, including the senior officers who hold the gambling licence and liabilities associated with this, the financial resource in that there is no budget to support the operational costs, resource input is considerable and does not translate into higher income raised by the causes.

The existing platform is therefore no longer viable for the council to manage and resource.

 

6.0       THE POSSIBLE IMPACTS OF WITHDRAWING THE LOCAL LOTTO FOR THE HARROGATE DISTRICT

6.1       A key impact would be the loss of income to The Local Fund community pot which is open to all VCSE organisations across the former Harrogate District.  Two Ridings Community Foundation currently manage and administer this fund.  The lotto income is a reasonable contribution to the annual grant giving at circa £14-15k a year, however Two Ridings continue to seek philanthropic giving and have secured a new fund of circa £60k a year into the fund for children and young people activities in 2025/26. Eventually this fund will become a substantial endowment of £1million alongside the other funds held within the Local Fund.  This has grown the fund significantly.

 

6.2       Other philanthropic giving is being explored and it is hoped that any income lost from The Local Lotto could be replaced in time for the 2027/28 allocation when the existing Lotto contribution would cease.  Income generated from 2025/26 will be allocated via the Local Fund in June/July 2026.

 

6.3       Some of the smaller grass roots causes have worked incredibly hard to build up their player base to achieve a regular income. These causes would need to be supported and offered some alternative options to help them to bridge their income gap.  

 

7.0       ALTERNATIVE PROVISION OPTIONS

7.1       Alternative options are being explored to mitigate against the council withdrawing this provision. It is recognised that a local partner/ organisation may have more traction and influence than the council in supporting local groups and could generate more income for community groups in the area. Open calls have been made over the last few months to other VCSE community partners both at a North Yorkshire and former Harrogate District level to explore whether they would be willing to take on the community lottery provision operations.

 

7.2       Below is a summary of the options explored.

 

i)     Local community partner to take on the provision: A VCSE community partner who covers similar geography to the existing community lottery footprint to take over the operational responsibility.

 

Considerations/benefits:

·         The community lottery will be locally run by a known trusted community partner hopefully leading to further income generation and contributing to the sustainability of the sector at a local place-based level.

·         A community partner can utilise their existing communication channels, networks and influence to drive messages about the community lottery which should translate into both more local causes signing up to use the platform and subsequently more players and income.

·         An organisation that constitutionally covers a wider area than one town locality is ideal as relationships are already established and there are no boundary governance issues.

·         The Local Fund, community pot can remain as a cause to support although there will be less annual income as the operator costs (10p in every £1) would go to the provider to cover their running costs.

·         There would be a human resource requirement to possibly re-establish a scheme and then to cover the operational day to day running going forward but these costs would largely be covered through the operator income.

·         The community provider will need to apply for and meet any the regulatory requirements of a small society lottery licence.

·         The model could be replicated if successful across North Yorkshire by other VCSE anchor/ community organisations.

 

ii)    Refer existing causes to The Giving Machine: This is a national charity who hosts a community lottery for any charity/community group across the country.  They currently host over 600 causes across the UK.  Gatherwell are also their ELM so have a similar platform to the existing Local Lotto although the ticket model is slightly different.

 

Considerations/benefits:

·         Causes wouldn’t have any reporting requirements or liabilities to manage, like the current model.

·         The ticket structure could be different so causes could get less monthly income.

·         Existing causes would have to move onto the platform and re-establish their player support base.

·         THE LOCAL FUND (community pot) could be set up as a cause and would need to be promoted locally should the Local Fund steering group wish to.

·         The causes would need to do all of their own local communications themselves as the provider doesn’t have a local footprint to utilise to gain supporters. The pool of potential players will be reduced and there will be less chance of ad hoc players as the community reach will be limited.

 

iii)   Local collaboratives to establish their own lotteries: Local groups of causes that have a common interest area could set up their own place-based community lottery.  Again, this could be a source of income for the organisations as they could keep the 10p in the £1 ticket sale to cover operational costs if they wished a similar ticket model to the current one.  NYC could advise those causes who wish to pursue setting up their own community lottery.

 

Considerations/benefits:

·         A lead organisation would need to be identified as the legally responsible organisation for the small society licence requirements.

·         There would be a significant human resource commitment to both establish the scheme and then after the initial set up manage the operational day to day running going forward. Many of these causes are volunteer led and may not want this responsibility.

·         The community fund element could continue or cease depending on whether the collective want to continue to support other local causes through their income generation.

·         The resource required would be greater than the benefits achieved to the small number of causes involved.

 

iv)   Alternative fundraising methods: As part of the wider VCSE offer piece of work the council will consider alternative opportunities to provide investment into the sector.  This includes reviewing the councils existing grants provision, seeking out opportunities for other funders to invest across North Yorkshire and embedding community wealth building/social value and philanthropic giving into our communities.

NYC, along with its VCSE Infrastructure partner, Community First Yorkshire, will provide support to groups on sustainable fundraising and alternative fundraising methods.  This will also include advice on where to look for grant funding opportunities and how to get support in completing applications if it is required.  Our partner, Two Ridings Community Foundation, can also support communities set up local place-based community funds and advise on philanthropic giving.

 

8.0       NEXT STEPS

8.1       The preference is for a VCSE community partner to continue the community lottery provision across the former Harrogate district area from the end of May 2026 onwards. Discussions are ongoing with an interested partner however confirmation of transition arrangements and further due diligence is still required before a final decision can be made. The commitments, operational and regulatory requirements have been presented so that there is an understanding of the resources required. There is also an acknowledgement that as part of the transition players and causes may not continue impacting on the operational income generated but with a bit of development the community lottery will grow even further than what the Council has achieved.

           

8.2       The existing branding and assets will be transferred across to a community partner as this sits with the sister branding of The Local Fund. Both were developed externally at the same time independent of the Council for the partnership projects.

 

8.3       Work will be done to communicate any transition plans to existing players and causes during the last few months of the existing operation so to reduce the risk of losing players and causes.  Over the next 6 months work will need to be done on closing the existing platform and aiding the transition if agreed.

 

8.4       All existing causes utilising the Local Lotto platform were invited to attend a meeting on the 27th of November to discuss the future provision options. On the same day local North Yorkshire Councillors were also briefed of the intentions. Players will be notified once the transition milestones are confirmed, we would like the existing provision to continue to run for as long as possible, so the causes continue to receive their monthly income before any new arrangements if at all come into place.

 

9.0       ALTERNATIVE OPTIONS CONSIDERED

9.1       The alternative option is to cease The Local Lotto for the Harrogate district and not provide any alternative option. This has been rejected as North Yorkshire Council recognises the contribution the VCSE makes across the area and without regular income and support communities will not thrive or be sustainable.

 

10.0     FINANCIAL IMPLICATIONS

10.1     All remaining income generated for the community fund (The Local Fund) from July 2025 to when the last player payment is taken will be allocated in July 2026 when the next round of grant funds will be allocated. This will be communicated to all players prior to the closure for transparency purposes.

 

10.2     The council will need to pay the outstanding Gambling Levy for the 2025-26 financial year however this is 0.1% of total income so is minimal. The 2024-25 payment was £20.71.

 

10.3     North Yorkshire Council currently receive THE LOCAL FUND income on a monthly basis, this is then transferred once a year to Two Ridings Community Foundation for the annual competitive community grant process that they administer on behalf of The Local Fund partnership (HADCA and North Yorkshire Council are the other partners). Should the community fund cause option continue following any transfer of operations discussions are to be had to see if Two Ridings can receive this monthly income direct given they manage this fund instead of it coming into the council first.

11.0     LEGAL IMPLICATIONS

11.1     The existing contract for the ELM provision delivering The Local Lotto in the former Harrogate District expires in May 2026.  Formal notice will be served on Gatherwell once the decision to cease the council’s involvement has been made.

 

11.2     To adhere to data governance legislation the Local Authority will need to cease its operations of the community lottery in alignment with the ending of the ELM contract provision which expires at the end of May 2026. Advice is being sought from the relevant services on any transition to a community provider and what this might entail.  

 

11.3     The Gambling Commission will be notified of the council’s intentions to cease as the operator in due course as will the Lotteries Council to whom we are a member of to meet licence requirements.

12.0     EQUALITIES IMPLICATIONS

12.1     Although The Local Lotto is an online community lottery there is provision for those who can’t sign up digitally. Gatherwell ensure accessibility is considered within the operations and provide an alternative helpline for those who require it. The transition to a community partner would have this facility available if Gatherwell remains as the ELM.

 

12.2     Many of the causes who are using The Local Lotto platform support residents who may be defined as vulnerable or fall within a protected characteristic group. Hopefully the causes will continue to raise funds via one of the alternative options so that they can continue to support these individuals.

 

12.3     Safeguard measures are provided as part of the Gatherwell operating model to ensure vulnerable individuals are protected from the harms of excessive gambling.

 

13.0     CLIMATE CHANGE IMPLICATIONS

13.1     The Local Lotto has minimal impact on climate change. It is an online lottery which reduces the impact on the environment. The only impact is that one of the groups using the platform to raise funds is Zero Carbon Harrogate who raise funds for their initiatives and activities. They will have the option to continue using the alternative platforms mentioned above.

 

14.0     CONCLUSIONS

14.1     The Local Lotto operations are no longer considered viable for the council considering the resource required to continue the operations post May 2026, the increased regulation and liabilities, the geographical footprint it covers, and the income generation made. Work is being done to lessen the negative impact of any change in provision going forward for all currently involved, causes and players. The timeline going forward and how the operational transition is dealt with to the end of May 2026 when the contract expires with the ELM will be a priority piece of work. North Yorkshire Council are committed to support the development of an alternative provision.

 

15.0     REASONS FOR RECOMMENDATIONS

15.1     The current contract with the External Lottery Manager (ELM) (Gatherwell Ltd) ends in May 2026. A full procurement exercise would be required to continue, but this is not recommended due to cost, complexity and diminishing returns to the council. It is felt that the community lottery would now thrive if it were transferred to a community provider.

 

16.0

RECOMMENDATION

 

 

i) Cease the operation of the local authority operated The Local Lotto by the end of May 2026 and support any transition to a community partner.

 

 

Rachel Joyce

Assistant Chief Executive – Local Engagement

County Hall

Northallerton

28.11.2025

 

Report Author – Ann Duncan, Senior Development Officer

Presenter of Report – Rachel Joyce, Assistant Chief Executive, Local Engagement

 

Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.