National lottery profits surge as good causes garner less – MPs report

Gambling watchdog should push Camelot to ensure fair share goes to charities, committee says

The government’s Gambling Commission should pressure Camelot to change the way it runs the national lottery to ensure more money goes to good causes amid rising profits for the company, a cross-party committee of MPs has said.

The current lottery licence, which runs until 2023, is overly long and too inflexible, the public accounts committee (PAC) said in a report, making it hard to respond to consumer changes which had seen incomes for good causes drop by 15% in a year.

In the longer term, the report found, while money for charitable causes raised by the lottery had climbed by 2% between 2009-10 and 2016-17, over the same period Camelot’s profits increased by 122%, from £39m to £71m.

The PAC has made a series of recommendations, including that the Gambling Commission take steps to seek “a fair return” for good causes, and that the next national lottery licence is sufficiently flexible to guarantee this.

It has also urged Camelot to do more to support gambling addiction education, warning that the low stakes for the lottery and scratchcards were appealing for many teenagers, and could herald the beginning of problem gambling.

“Raising money for good causes is one of the founding principles of the national lottery but this objective is under threat,” said Meg Hillier, the Labour MP who chairs the PAC.

“It would be a sad and significant loss to many deserving organisations and individuals if that funding, which has amounted to some £37bn 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 2%.”

Camelot has operated the national lottery since it launched in 1994, and is now in its third licence, agreed in 2009. This was amended in 2012, with the end date extended by four years to 2023.

Under the renewed licence, Camelot’s profits were now about 1% of sales after tax, rather than the level of 0.6% expected by the Gambling Commission, which told the MPs the new terms had, in hindsight, been too favourable to Camelot.

Reasons identified in the PAC report for the 15% drop in the money handed to good causes in the year to March 2017 included a fall in overall lottery sales, and a parallel shift away from people buying draw tickets towards scratchcards.

While the draw-based games raise 30p in the pound for good causes, this falls to 10p for scratchcards, the report said. However, the Gambling Commission has no way to amend Camelot’s licence to take account of such changes.

The report recommends that the Gambling Commission should evaluate whether changes made by Camelot intended to boost participation in the draws, such as more lottery balls and changes to jackpots, had brought any benefits.

The PAC also raises the possibility that the decline in the amount of lottery proceeds channelled into worthwhile causes could further depress participation, recommending better communication about the link between the level of contributions from various types of games.

While Camelot had increased its annual contribution to GambleAware from £190,000 to £300,000 to support measures to combat problem gambling, the report said this “falls well short of expectations”.

A Camelot spokeswoman said the company would work with the Gambling Commission and the Department for Digital, Culture, Media and Sport to maximise the money spent on good causes.

She said: “During the third licence period, annual returns to good causes have been, on average, 30% higher than under the previous licence.

“We’ve already seen some encouraging signs that the initiatives from the strategic review that we carried out last summer are working, and are confident that we have strong plans to get the national lottery back into growth.”

A spokeswoman for the Gambling Commission said: “We are extremely disappointed that returns to good causes have declined and we will continue to hold Camelot to account for the performance of the national lottery.

“Over the past 12 months, we have required it to carry out a review of the effectiveness of its board. We have also strengthened our approach to assessing [Camelot’s] performance.”

Contributor

Peter Walker Political correspondent

The GuardianTramp

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