A parliamentary committee has slammed UK’s National Lottery for failing to contribute more money to good causes, while recording a continued growth in profits.
The Commons Public Accounts Committee (PAC) recently presented a report on the general financial performance of National Lottery operator Camelot and the money it has contributed to good causes over the years. The lottery operator provides various lottery products under a license from the UK Gambling Commission.
Camelot has operated UK’s National Lottery since it launched back in 1994. The gaming group is now into its third license from local regulators. That license was issued in 2009 and was extended by four years in 2012. It is now valid through 2023.
The PAC noted in its report that lottery returns for good causes increased only 2% in the period between 2009-10 and 2016-17, while Camelot’s profits from various products jumped 122% from £39 million in the 2009-10 financial year to £71 million in 2016-17. MPs from the Committee further pointed out that good causes returns fell from 27p per pound spent on National Lottery products in 2009-10 to 22p per pound spent in 2016-2017.
The PAC urged the UKGC to take the necessary measures to ensure that Camelot provides “a fair return” for good causes. The committee also criticized the gambling regulator for failing to include a break clause in 2012 when the lottery operator’s license was renewed. This basically means that no changes in the terms of said license could be implemented without Camelot’s agreement.
Scratchcards’ Growing Popularity and Their Impact on Returns
The PAC report dwelt on scratchcards and instant win games’ growing popularity and pointed out that while these had a positive effect on Camelot’s profitability, they were actually among the reasons why returns for good causes have decreased over the past several years.
The lottery operator has previously admitted that the above-mentioned products indeed provide lower returns for good causes as they offer higher prizes for consumers, thus encouraging them to buy such products.
A scratchcard’s return for good causes amounts to an average of 10p per pound spent, which is three times lower than the draw-based games’ average of 30p per pound spent.
Commenting on the report’s findings, committee chairwoman Meg Hillier said that contributing money to good causes had been one of the founding principles of the National Lottery and that goal was under threat now. She further urged that proper actions were undertaken before funds to “many deserving organizations and individuals” were lost.
Responding to the PAC arguments, a Camelot spokesperson said that annual returns for good causes under the company’s current license have generally been 30% higher than under its previous license.
The gaming group launched last summer an internal review of its business after lottery sales tumbled 9%. The Camelot spokesperson said that the initiatives introduced after the review have shown encouraging signs that the National Lottery is on the right path to get back into growth.
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