Lotto payouts lag behind big rise in profits

‘Raising as much money as possible’

THE National Lottery operator has seen its profits soar – even though the amount going towards good causes has risen by only 2 per cent.

Official auditors have found that Camelot’s profits increased from £39million to £71million between 2009-10 to 2016-17 – up 122 per cent.

But over the same period, the amount of cash given to charities had gone up by just £31million, or 2 per cent, to £1.5billion.

The National Audit Office (NAO) said the discrepancy was down to the fact that official rules link Camelot’s profits to sales rather than the amount raised for good causes. Yet the same figures show that the sales of tickets and scratch cards went up 27 per cent to £6.9billion between 2009-10 and 2016-17 – far lower than the increase in profits.

Part of the reason for the discrepancy is that scratch cards have become more popular in recent years – and these do not pay out as much to good causes.

The NAO report warned that this phenomenon led to overall sales falling last year by 9 per cent, leading to a reduction in income for good causes of 15 per cent.

Camelot has predicted a further fall in sales and income for good causes in 2017-18. This could lead to a shortfall for the organisations which allocate funds.

The NAO said distributors, which include UK Sport, Spirit of 2012, the Heritage Lottery Fund and the Big Lottery Fund, often had commitments spanning many years, ‘so it is likely that commitments will exceed their fund balance at a given date’.

As of February this year, the approximate return for good causes ranged from 34p for each pound spent on draw-based games bought online to 10p for scratch cards, with some scratch cards returning as little as 5p.

Camelot told the NAO that scratch cards and instant-win games returned less to good causes due to the need to offer a higher proportion of proceeds as prizes to encourage consumers to participate.

Last month, Camelot signalled changes to Lotto to give players ‘a better winning experience’ and encourage more people to play draw-based games.

There will be a new game that gives winners a monthly payout for life. And it looks likely that Camelot will change the prize tiers in the main Lotto game.

The share of the prize pool that goes to the jackpot winner might be reduced in favour of giving more to people lower down the prize tiers.

A spokesman for Camelot said it did not agree with the NAO’s comparisons of profits versus payouts to beneficiaries. He added: ‘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 per cent of all National Lottery revenue back to winners and society, one of the highest percentages in the world.

‘In contrast, our profit after tax is around just 1 per cent of total revenue.’