The DCMS Committee has come to a “mixed” judgment regarding its review of the fourth UK National Lottery licence competition, stating that it had been “poorly managed”.
In arriving at its conclusion over the UK Gambling Commission’s (UKGC) debut tenure overseeing the National Lottery licence contest, it said that the process was “beset with controversy”.
The fourth National Lottery licence competition saw Allwyn awarded the next 10-year stewardship, bringing an end to Camelot’s 28-year period as the lottery’s operator since it began in 1994.
Camelot and International Game Technology (IGT) had contested the decision and pursued litigation of up to £600m, which the Committee feared could have been taken directly from good causes funds. This action has since been dropped.
MPs also criticised Camelot for “seemingly prioritising its own profits” over good causes, alongside refusing to provide the Committee with evidence regarding its performance.
The cross-party group of parliamentarians also asked for Allwyn to provide GambleAware with a bigger financial contribution, closing the gap between the lottery and good cause obligations.
He replied: “I think to some degree it has. There has been a focus on scratchcards over the main lottery game, and that’s meant that the proportion of lottery money going to good causes has fallen over the last decade.
“Also, this has partly helped break the link in the public’s mind between the lottery and those good causes, which is after all the reason the lottery was founded in the first place.”
Knight also offered the view that scratchcards are “more addictive” than other products available via the lottery, as well as noting Camelot’s recent financial penalty.
The report outlined how gambling harm experts have challenged the marketing and advertising strategies of the lottery, including advertising to vulnerable players, “pushing” products linked with gambling harm, and its unwillingness to support charities that help treat gambling harm.
Knight also highlighted the criticism the commission has faced, stating: “The Gambling Commission has not managed the process of the latest awarding of the lottery contract well at all.
“It has failed to do so in a timely way, in a way that is transparent, and this itself has led to legal action which if it came to pass could lead to £600m being taken from good causes – and this is far from ideal.”
MPs noted in the report’s summary: “The Gambling Commission’s decision to allow National Lottery tickets to be purchased on credit cards in certain circumstances also raised eyebrows and needs to be re-examined.”
The committee concluded that the fourth National Lottery licence competition was “poorly managed”.
The MPs also highlighted how this has been the case in previous contests, particularly the third competition in which Camelot’s only competitor was Sugal & Damani, stating it was “inevitable that Camelot would win”.
The report accused Camelot of “failing to live up to grand promises” regarding good cause returns in previous licence competitions, such as not meeting the second licence contest’s projected amount of £15bn.
Allwyn will begin operating the National Lottery in February 2024. Recently, the operator agreed to a deal with the Ontario Teachers’ Pension Plan Board to acquire Camelot UK Lotteries Limited, which is expected to close in Q1 2023.
Knight concluded: “I think that the Lottery can still work, it does an awful lot in our local communities, it has given billions to those communities to many years, but what we’re going to do is focus away from the scratchcards and the idea of a ‘quick fix’ if you like, and more towards linking once good causes and the lottery in people’s mind.”