Joint action needed on threat to lottery funding for good causes

5 April 2018

The Public Accounts Committee report finds that since 2012 Camelot has made profits well in excess of what was envisaged in the original 2009 licence, whilst returns for good causes have dropped, by 15% in 2016–17 compared to the previous year.

Camelot profits 122% higher in 2016–17 than 2009–10

The Gambling Commission did not include a reopener or break clause in the 14-year contract. This means that the terms of the contract can only be changed with Camelot's agreement. Camelot's profits were 122% higher in 2016–17 than in 2009–10.

The drop in returns for good causes was because more players bought scratch cards but sales of draw based games, with higher returns to good causes, declined.

Benefits to good causes needs better publicising

In the context of falling income for good causes, the Department for Digital, Culture, Media & Sport needs to be wary of the risk that Lottery funding programmes become unaffordable.

It also needs to give lottery distributors better data on lottery sales so that the distributors are better placed to plan their grant programmes.

The Department, Camelot and the Lottery distributors all need to work together to better publicise the benefits to good causes as part of efforts to reverse the recent decline in sales.

Chair's comments

Comment from Committee Chair, Meg Hillier MP:

"Raising money for good causes is one of the founding principles of the National Lottery but this objective is under threat.
It would be a sad and significant loss to many deserving organisations and individuals if that funding, which has amounted to some £37 billion since 1994, should dissipate as a result of inaction now.
Our report lays bare the need for a concerted effort from Government, the Gambling Commission and Camelot—a monopoly supplier whose profits more than doubled in seven years while returns for good causes grew by just two per cent.
It is a stark illustration of the challenge to be tackled that figures for that final year, 2016–17, show a drop in good causes' year-on-year income of 15 per cent.
Lessons must be learned from the renegotiation of Camelot's licence in 2012, which was too generous to the provider and too inflexible to protect the interests of grant recipients.
But the detrimental effects of tinkering with the format of the Lottery, and a decline in public awareness of its support for good causes, are also clear.
There must be a renewed focus on delivering returns for good causes and action to ensure these funds can be managed in a sustainable way.
That should include Government providing real-time data to the 12 public bodies responsible for distributing Lottery funding, to enable them to manage their programmes effectively and ensure grant commitments are affordable."

Further information

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