Everyone wins with an innovative National Lottery
IHAVE a question. If I offered you 27 per cent of £1.00 or 23 per cent of £1.60 with no strings attached, which would you prefer? I think I already know the answer but the reason I ask is because of the unfair criticism levelled at Camelot from some quarters for delivering a lot more money to National Lottery Good Causes than it used to.Yes, that’s right – criticism for delivering more money and at a time when National Lottery funding has never been more needed.
Let me illustrate the point.At the start of the current third licence period in 2009, The National Lottery generated £1.37billion for Good Causes – or 26.75 per cent of total sales. Fast forward to 2020-21 and it generated £1.88billion for Good Causes – or 22.5 per cent of total sales.
So even though the percentage rate of return to Good Causes was lower in 2020-21, the amount of money generated was more than £500million higher. With the majority of grants being for £10,000 or less, that’s enough money to fund 50,000 new projects – initiatives that could make a real difference to the lives of people and communities across the UK.
DESPITE this extra revenue and the funding capabilities it makes possible, some people are still under the illusion that a lower percentage return is bad news for Good Causes. I fail to see how. Surely, it’s the actual cash amount that matters more to the beneficiaries of National Lottery funding – after all, they can’t spend percentages.
The bottom line is that Good Causes are now far better off in monetary terms because the slice they receive from sales comes from a much larger National Lottery pie. That’s the result of Camelot putting in place the right mix of ingredients to make the pie bigger and so fulfil its objective to maximise returns to Good Causes, namely: developing a balanced and appealing portfolio of games that offers something for everyone; innovating to meet changing consumer appetites, needs and behaviour; and building a strong and healthy brand that better connects The National Lottery’s unique purpose with play.
This strategy is clearly working. Total sales are now 62 per cent higher than they were at the start of this licence period and at record levels. Good Causes haven’t been the only ones to benefit significantly from this bigger pie either – annual payments in Lottery Duty to the Treasury are now £387million higher and at their highest-ever level, while annual prize money awarded to players is some £2.2billion higher.
It also means that The National Lottery continues to return 95 per cent of all sales revenue to winners and society – one of the highest percentages of lottery revenue given back in the world and clear evidence that it is delivering for everyone in the UK.
You may be asking yourself why Camelot doesn’t just increase the size of the slice that goes to Good Causes from this much larger pie. The short answer is that the only way to do that would be to reduce the level of prize money available to players. With Lottery Duty fixed at 12 per cent, and with retailer commission and the proportion that Camelot can retain for operating costs and profit set out in its licence, the only lever available to increase the percentage given to Good Causes is prize money.
HOWEVER, as people predominantly play lotteries to win prizes, making games less attractive by offering smaller and fewer prizes would be counter-productive. With players looking for better value elsewhere, ticket sales would soon start to decline – and The National Lottery’s contribution to Good Causes and the Treasury would also fall.
As Camelot’s performance shows, the key to sustaining the long-term health of The National Lottery is to give people a choice of games that they want to play, and to make those games as attractive and as generous as possible in order to maintain their appeal in what has become a fiercely competitive market.
Do we really want to turn back the clock and undo all of the progress that has been made, as some people suggest, by reverting to a much more limited choice of games offering lower prize money – and ultimately lower returns for Good Causes, players and the Treasury?
Or do we want a National Lottery that continues to be one of the most successful and innovative in the world? One that is delivering record returns to Good Causes, record levels of prize money to players and record payments in Lottery Duty to the Government – and is in its best-ever shape.
‘The bottom line is that Good Causes are now far better off’