Newsagents fear new UK National Lottery licence holder could change lottery’s main point of sale

UK newsagents are concerned that a new National Lottery operator would put more emphasis on digital point of sale for the lottery, affecting community stores.
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Newsagents in the UK have expressed concerns that a new National Lottery licence operator would put more emphasis on online and app point of sale for the lottery, affecting retailers, according to a report by the Mirror.

Current National Lottery operator Camelot works with 44,000 retailers across the UK, with independent outlets making up the majority. They earn around 5% commission for each draw-based game sold and 6% on each scratchcard, as well as 1% on certain prizes paid out in-store.

However, a new operator could soon be in charge of the national game. Camelot is going up against Sazka Group’s UK identity Allwyn, Italy’s Sisal, and India’s Sugal & Damani in the Fourth UK National Lottery licence competition, which is being run by the UK Gambling Commission (UKGC).

If a new operator dethrones Camelot, which has run the lottery since its inception in 1994, more emphasis is expected to be put on digital lottery sales, which is troubling newsagents.

Retail trade publication The Grocer recently polled 250 convenience store retailers where nearly half said the National Lottery is more important than ever to their business. A third are unsure about a prospect of a new licensee and more than 10% worried about change when the 27-year contract comes to an end.

Concerns were also raised that a new operator may not understand convenience stores well or would focus more on online gambling.

Jason Birks, Deputy VP at the National Federation of Retail Newsagents, was quoted: “Currently, the National Lottery does have an online presence but I’ve heard that some of the bidders want to do a lot more online and from a high street point of view, and from the point of view of community-based retailing, we need to protect bricks and mortar.

“Those in government need to not only view online as the ‘trendy’ thing to do but bear in mind that people still like to visit bricks and mortar retailing.”

However, the survey wasn’t all supportive of the current National Lottery operator, as almost a fifth said they felt optimistic that a new operator could bring in much-needed change, while under 5% said the game’s products and prizes need to be overhauled.

One independent retailer told The Grocer that Camelot doesn’t deserve another licence as they have been “very average with limited innovation” over the past few years with “mediocre support for retailers with too much red tape” and a new licence holder can create “a fresh approach and more energy.”

Lumina Intelligence Senior Insights Manager Katie Prowse added: “Camelot Group has run the lottery since its inception in 1994 and has faced challenges more recently due to the increased pressure from gambling regulators, online and digital games and gambling as well as increased costs.

“Retailers do risk changes to costs and operational proceedings in the event of a new lottery runner and it is expected that attention will rise across the year with the pitch due for 2023.”

A Camelot spokesperson told the Mirror that on average, National Lottery retailers earned around £7,000 in commission per store in 2019/20, saying in a statement: “We fundamentally believe that The National Lottery’s success – which culminated in record sales last year – is reliant on building and maintaining a healthy retail channel.

“That’s why we’ve invested heavily in retail at the same time as growing the largest digital lottery channel in the world by revenue.

“While we’re unable to share specific details of our bid, we can say that Camelot’s philosophy remains the same – with retail being a cornerstone of our strategy. National Lottery retailers have been fantastic partners to us over the past 27 years and, as they’ve always been there for us, they can expect our continued support.”

A UKGC spokesman told the Mirror that retailers will continue to play an important role under the new licence, stating: “The outcome-based approach of the fourth National Lottery licence will allow the licensee flexibility to innovate while ensuring they continue to meet high standards of player protection and propriety.

“As part of their commitments, they will be required to ensure players can easily enjoy games through a range of sales channels, to maximise the appeal and reach of the National Lottery. This obligation, and the evidence showing that physical retail contributes significantly to National Lottery sales, means the retail network is likely to continue to play an important role for the National Lottery under the fourth licence.”