UK National Lottery operator, Camelot, is being investigated by the government following a National Audit Office (NAO) report which revealed that money being diverted to good causes has decreased despite an overall rise in profits.
Camelot’s profits have increased by 122% over a seven-year period, however National Lottery income for good causes has decreased by 15% year-on-year to April. This has raised concerns over whether Camelot is fulfilling its intended duty as operator of the National Lottery and operating within the National Lottery Act.
The National Lottery’s purpose is to raise money for a variety of good causes and charities in an effective and responsible way. These includes causes in the arts, sports, heritage, health, education, environment and charitable sectors.
The Parliament’s spending watchdog has launched an investigation following the publication of the NAO report, released on Wednesday 13th December. The report states that income for good causes has decreased by £1.63bn as lottery sales decreased by 9% to £6.93 billion.
Despite this recent decline, Camelot’s accounts show an overall positive trend, with the £6.93 billion figure in 2016-17 representing a 27% increase from 2009-10. In addition to this, profits have been consistently increasing at a proportionally higher rate than both income for good causes and lottery sales.
The report does point out that one of the causes for the noted decrease in funding for good causes is that the British public has turned away from more traditional draw-based lottery games in favour of scratch cards and instant-win games.
According to Camelot, these games offer a smaller portion of revenue to good causes due to the need to maintain a high enough prize money incentive for players to participate. Draw-based games saw a decline of 13% this year, compared to 2% for scratch cards and instant-win games.
With recent declines in sales, and what would seem like a case of the British public losing interest in lottery games, Camelot has been reviewing its business practices and its offerings, hoping to attract a new generation of players in years to come. It defends itself from any accusations of malpractice, stating that the vast majority of its revenue goes to directly winners and good causes.
A spokesman said: “The NAO report restates what we publicly acknowledged back in June in relation to National Lottery sales and returns to good causes. Since then, we have carried out a wide-ranging strategic review of the business and announced strong plans to get the National Lottery back into growth next year and raising as much money as possible for good causes.
We continue to return around 95% of all National Lottery revenue – almost £6.6bn in 2016/17 – back to winners and society, one of the highest percentages in the world. In contrast, our profit after tax is around just 1% of total revenue – £70.5m in 2016/17.
“Since the start of our third operating licence in 2009, returns to winners and society have increased by almost £1.8bn, while shareholder profit has increased by just £26m over the same period.”