A group of MPs have found ‘mixed results’ in their review of the fourth National Lottery licence contest, as Camelot reports record results in its outgoing financials.
The DCMS Committee published its review this morning, in which it concluded that the UK Gambling Commission’s (UKGC) debut tenure overseeing the National Lottery licence contest has had ‘at best mixed results’.
The entire process was ‘beset with controversy’, the MPs asserted, as the competition awarded the next 10-year licence to Allwyn, ending Camelot’s 28-year reign as sole operator of the lottery since its inception in 1994.
Notably, although Allwyn is currently set to become the next steward, Camelot and International Game Technology (IGT) are pursuing litigation of up to £600m, a figure the Committee fears could be taken directly from good causes funds.
Camelot has not escaped the MPs’ scrutiny, having been criticised for ‘seemingly prioritising its own profits’ over good causes investments, and for refusing to give evidence to the Committee on its performance.
Moving forward, the cross-party group of parliamentarians has called on Allwyn to make a greater financial contribution to GambleAware whilst also bridging the gap between the lottery and its good cause obligations.
When quizzed by BBC Radio Scotland as to whether the Lottery has ‘lost its way’, Julian Knight MP, DCMS Committee Chair, said: “I think to some degree it has. There has been a focus on scratchcards over the main lottery game, and that’s meant that the proportion of lottery money going to good causes has fallen over the last decade.
“Also, this has partly helped break the link in the public’s mind between the lottery and those good causes, which is after all the reason the lottery was founded in the first place.”
NATIONAL LOTTERY REPORT
Following the publication of the @CommonsDCMS report on the future of the National Lottery earlier, I spoke to BBC Radio Scotland about my Committee's report. My interview can be found on the link below???https://t.co/vMTN2Rmoct
— Julian Knight MP (@julianknight15) November 22, 2022
Adding that scratch cards are ‘more addictive’ than other lottery products, Knight also pointed to Camelot’s recent financial penalty – whilst the report outlined how ‘gambling harm experts’ have questioned the lottery’s marketing and advertising strategies.
This has included the personalisation of advertising towards vulnerable players, ‘pushing’ of products associated with harm and the lottery’s apparent unwillingness to support gambling harm treatment charities.
The Commission itself has also faced criticism on this, however, with Knight informing the BBC: “The Gambling Commission has not managed the process of the latest awarding of the lottery contract well at all.
“It has failed to do so in a timely way, in a way that is transparent, and this itself has led to legal action which if it came to pass could lead to £600m being taken from good causes – and this is far from ideal.”
In a summary of the report, MPs noted that: “The Gambling Commission’s decision to allow National Lottery tickets to be purchased on credit cards in certain circumstances also raised eyebrows and needs to be re-examined.”
Overall, MPs concluded that the licence contest was a ‘poorly managed competition’, not too similar to previous bidding battles, noting that Camelot’s only competitor in the third contest, Sugal & Damani, publicly criticised the structure of the process, stating ‘it was inevitable that Camelot would win’.
Camelot, the report outlined, has been accused of ‘failing to live up to grand promises’ on good cause returns in past Lottery licence competitions, such as not meeting the £15bn projected following the second licence contest – which was also lambasted by Sugal & Damani as ‘a licence to underperform’.
In its latest financial results for the first six months of the 2022-23 financial year, covering 1 April to 24 September 2022, Camelot announced that sales had surpassed $4bn for the first time in its history, a 2.6% increase on the year prior.
A product breakdown saw draw based game revenue rise by 7.5% to £2.4bn (£2.3bn) and digital sales by 13% to £1.8bn (£1.6bn), whilst in scratchcard and online instant win sales were down 3.7% to £1.7bn ($1bn).
Good causes returns, meanwhile, rose by 8.1% to £956.6m (H1 2021/22 – £884.5m), whilst £2bn was awarded to customers in prize money.
Camelot CEO, Nigel Railton, commented: “Thanks to the commitment and professionalism of everyone at Camelot – and all of our hard work over the last few years – this record half-year performance confirms that we have a very healthy and successful National Lottery that continues to benefit the whole of the UK.
“These fantastic results also demonstrate our ability to adapt quickly and decisively to fast-changing and challenging economic conditions, while maintaining our longstanding reputation for selling tickets in a socially responsible way – attributes that have helped to keep The National Lottery in excellent health at such an important time for the UK.”
The 18 month handover period from Camelot to Allwyn is due to commence in February, and the incoming operator has earmarked good cause funding as one of its primary objectives.
“I think that the Lottery can still work, it does an awful lot in our local communities, it has given billions to those communities to many years, but what we’re going to do is focus away from the scratchards and the idea of a ‘quick fix’ if you like, and more towards linking once good causes and the lottery in people’s mind,” Knight concluded.
This week, the Ontario Teachers Pension Plan (OTPP) agreed to sell Camelot UK to Allwyn for an undisclosed sum. Subject to regulatory approvals Allwyn will be allowed to take control of National Lottery stewardship in 2023.
Robert Chvátal CEO of Allwyn underlined that it’s the business stands by its winning decree to reinvigorate the National Lottery for all audiences to guarantee optimal fundraising for good causes.