MPs call for action to protect National Lottery funding

MPs have called for the government and the gambling regulator to protect National Lottery funding for good causes after a sharp fall in revenues.

The Commons’ culture committee said Camelot, the lottery operator, had made more money than expected since its contract began in 2009. Profit has more than doubled for Camelot, which is owned by Canada’s Ontario Teachers’ Pension Plan, while returns for good causes have barely grown, they said.

The lottery was established in 1994 with the aim of raising money for good charities and community projects, resulting in £37bn going to those causes in that time. But the MPs said a fall of 15% in returns last year showed funding was under threat.

When Camelot’s contract to run the lottery was reviewed in 2012 the Gambling Commission agreed a deal too generous to Camelot, the committee said. The operator’s switch towards promoting scratchcards instead of draw-based games benefited Camelot but not good causes, which get more from draws, the MPs said.

Camelot has run the lottery since its launch. Its current contract runs from 2009 to 2023 and cannot be renegotiated without its agreement. It has not faced serious competition to run the lottery since Richard Branson’s failed bid in 2000.

Meg Hilier, who chairs the committee, said: “Raising money for good causes is one of the founding principles of the National Lottery but this objective is under threat.

“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%.

“Lessons must be learned from the renegotiation of Camelot’s licence in 2012, which was too generous to the provider and too inflexible to protect the interests of grant recipients.”

Returns for good causes have fallen from 27p for every pound spent in 2009-10 to 22p in 2016-17. Good causes get an average of 10p in the pound from sales of scratchcards compared with about 30p for draw-based games.

The committee called on Camelot to promote the lottery’s fundraising for good causes after awareness of its role fell among the public. Giving customers better information could help revive sales and funding to worthy projects, they said.

The government also needs to work harder to test affordability of programmes drawn up by the appointed distributors of the funds and to give them real-time information on weekly sales, the committee said.