Post-Camelot National Lottery must focus on good cause funding role and protecting players from gambling harm

23 Nov 2022 10:58 AM

Action is needed to boost awareness of the role the National Lottery plays in funding good causes, MPs said yesterday, in a cross-party report which also calls for the operator to do more to protect its players from gambling harms.

• Read the Full Report
• Read the Report Summary
• Find all publications related to this inquiry, including oral and written evidence

The DCMS Committee report calls for advertising to more prominently feature the link between buying a ticket and supporting good causes. It warns that a lack of awareness could lead to public calls for a boost to prizes at the expense of good cause returns, posing existential questions about the future of the Lottery.

To support those at risk of gambling harm, new operator Allwyn should make a greater financial commitment to the GambleAware charity and Lottery products should signpost support services.

The recommendations follow an inquiry into the Gambling Commission’s competition to award the next operating licence. The report concludes that the competition has been ‘poorly managed’, with the Committee concerned by reports that up to £600million may be diverted from the good causes budget due to the decision by outgoing operator Camelot to pursue legal action on the grounds of flawed process.

The report notes that Camelot has faced growing criticism in recent years, as National Lottery draw-based ticket sales and donations to good causes have fallen at the same time as Camelot’s profits have risen. The National Lottery's stalling returns to good causes appear to be the result of choices made by Camelot, which has prioritised games that allow it to retain a higher percentage of sales as profit. Camelot failed to make itself available for scrutiny during the inquiry.

Chair's comment

DCMS Committee Chair Julian Knight MP yesterday said:

“While the National Lottery has become a fixture of British life with millions enjoying its games each week, in recent years the ever more profit-orientated approach of Camelot has hit good causes in the pocket and pushed players towards potentially more harmful forms of gambling.

“The next licence period has got off to an inauspicious start with perceived flaws in the competition process leading to a compensation claim which could ultimately short-change charities and other good causes that rely on Lottery funding. The flaws must be fixed for the future.

“The Gambling Commission and new operator Allwyn now have the chance to work together to restore the link in the public’s mind between buying a ticket and supporting worthy causes and projects in their local communities. At the same time, there needs to be a proper financial commitment to supporting those at risk of gambling harms.

“Without a significant departure from the approach of the outgoing regime, you don’t have to be Mystic Meg to foresee a future where a clamour for big cash jackpots is prioritised over the Lottery’s original purpose to raise money for good causes, while more players are pushed towards gambling products that can seriously damage health and wellbeing.”

Main conclusions and recommendations

The fourth National Lottery licence

• The Gambling Commission has followed its predecessors in overseeing a poorly managed competition and the Committee is concerned that up to £600million in compensation could be diverted from good causes if legal action by Camelot and International Game Technology is successful. The commission should review the process and report back to the Committee.
• The Gambling Commission must vigilantly monitor Allwyn’s good cause returns to ensure
  that fund distributors are not once again short-changed.

Gambling harms

• After Camelot was fined earlier this year for the National Lottery’s inappropriate targeting of vulnerable consumers, the report highlights concerns raised by gambling harms experts that such targeting is being used to push forms of gambling that may be more harmful and which returns less funding to good causes.
• The Lottery operator and the Gambling Commission must commission and enable research into the gambling harms of advertising and marketing.
• The Lottery operator should by default meet the Gambling Commission’s suggested donation to the GambleAware charity. Camelot’s donation fell below the Gambling Commission’s suggested 0.1% of gross gambling yield.
• GambleAware branding should appear on National Lottery products to signpost players to support and increase the visibility of the charity.
• Exemptions within the ban on gambling on credit are ill thought through and subject to discretion. The loophole which allows consumers to continue to gamble using credit cards should be closed.

Distributing bodies

• The Committee welcomes moves by Arts Council England to rebalance funding across the UK. The Government should continue to ensure greater alignment between its investment priorities into areas of high economic or social deprivation and the distribution priorities of National Lottery fund distributors.
• Public awareness of the link between the National Lottery and funding for good causes remains lower than it should be. A clear majority of National Lottery product advertising should prominently feature the link between playing the Lottery and supporting good causes.

The wider sector

• Society or charity lotteries which raise funds for charities or other non-commercial organisations do not pose a threat to the charitable giving of the National Lottery. The rule that limits the prize to £25,000 or 10% of proceeds should be removed, with a new limit of £500,000.

Further information

• Inquiry: What next for the National Lottery?
• Digital, Culture, Media and Sport Committee