Camelot under pressure to provide fair National Lottery returns

Camelot under pressure to provide fair National Lottery returns

Tuesday, April 10, 2018 Posted by Luke Massey
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The PAC wants to bring lottery in line with other forms of gaming

The UK Parliament’s Public Accounts Committee (PAC) has issued a series of key recommendations concerning the National Lottery that would bring it closer in line with other forms of gaming.

The National Lottery is currently the most popular form of gambling in the UK in terms of prevalence. However, while profits have increased for the operator, Camelot, the amount of money it raises for good causes has seen a decline.

Said the PAC: “Good causes lost out when the Gambling Commission renegotiated the licence with Camelot in March 2012. Following the renegotiation in 2012 of its licence to operate the Lottery, Camelot’s profit has increased to 1% of sales after tax, rather than the 0.6% anticipated by the Commission in the original 2009 licence. Returns for good causes, per pound spent, have fallen from 27p in 2009–10 to 22p in 2016–17.”

“The licence,” it added, “is supposed to incentivise Camelot to maximise returns to good causes. But returns for good causes were only 2% higher in 2016–17 than in 2009–10, whereas Camelot’s profits were 122% higher.

“The Commission now acknowledges that the renegotiation in 2012 was too favourable to Camelot. Camelot is proposing game changes intended to reverse the decline in revenue and return more to good causes. Any changes will require the agreement of the Gambling Commission.”

The PAC recommends that the Gambling Commission should take steps to secure a fair return for good causes from game changes proposed by Camelot over the remaining life of the current licence.

The committee also drew attention to a lack of flexibility in the current operating licence, arguing that it does not do enough to protect the interests of good causes as player behaviour changes.

“Scratch-cards and instant-win games have become more popular, while sales of draw-based games have declined,” it said. “However, returns for good causes are much lower for scratch cards (on average 10p in the pound) than they are for draw-based games (on average 30p), and so good causes have suffered.”

In setting the next licence, the Gambling Commission needs to benchmark the Lottery against other regulated sectors to determine what a fair rate of return is for operating the Lottery and build flexibility into the licence terms to secure this fair return in changing circumstances, said the committee.

The last of the PAC’s observations concerned social responsibility. It noted: “We are not convinced that Camelot is doing all it can to support education and research for gambling awareness. Camelot believes that the majority of Lottery players do not see themselves as gamblers.

“Nevertheless, Lottery products, which offer the chance to win big sums for a relatively small stake, are easily accessible to 16 and 17-year-olds, and there is a risk that they could be the start of gambling problems.

“Given the popularity of the Lottery it is also clearly the case that there will be many people with gambling problems who are also Lottery players. Prior to our evidence session, Camelot agreed to increase its contribution to GambleAware from £190,000 to £300,000 and claimed that GambleAware were ‘broadly’ content with that amount.

However, GambleAware, which aims to prevent people from getting into problem gambling, and to support those who do, has stated that the amount falls well short of expectations that had been made clear to Camelot.

“Camelot should review its level of contribution to deal with problem gambling and explain to us within six months why this is a fair contribution to GambleAware for such a widely-played gambling product.”

Totally Gaming says: How times have changed for Camelot since it came under the regulatory auspices of the Gambling Commission in 2013. While players of Lottery products may not identify themselves as gamblers, it’s clear that those products are now being recognised for what they really are; opportunities to gamble.

The Lottery’s charitable status once insulated Camelot from some of the negativity surrounding gambling - including much of the onerous legislation that’s saddled street gaming since the Gambling Act 2005. That privilege is wearing thin.

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