UK National Lottery Profits Rising for Camelot, But Charities Fail to Benefit

Posted on: April 8, 2018, 01:00h. 

Last updated on: April 6, 2018, 08:15h.

Profits are soaring for the UK National Lottery, which has some British politicians wondering why the amount being given to charitable organizations has been dropping in recent years.

National Lottery Camelot charities
Camelot is making larger profits than ever from the National Lottery, but charities aren’t seeing the same boost. (Image: ITV)

Some MPs in the UK are asking the Gambling Commission to look into the dwindling returns for charities in the face of record profits for Camelot, the firm that holds the license for the National Lottery. Camelot’s profits in the 2016-17 fiscal year were up 122 percent when compared to 2009-2010.

Charity Not Beginning at Home

That same time period has seen the amount given to charities drop from 27 percent of all funds spent on lottery products to just 22 percent. And while they might be more acceptable if it meant the overall amount raised for these groups was increasing, even that isn’t happening: income for good causes was down 15 percent year-over-year in 2016-17.

A report by the Public Accounts Committee in the House of Commons has suggested that Camelot is making far more profit on the lottery games than was initially envisioned when they earned the contract to run the program. A renegotiation prior to a contract extension might be to blame, as the report suggested that the terms of that extension were “too favorable” to the company.

“Raising money for good causes is one of the founding principles of the National Lottery but this objective is under threat,” said Labour MP Mag Hillier, who chairs the committee. “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 two percent.”

Are Scratch Cards to Blame?

Some of the disparity is explained by the types of games that Brits are choosing to play. In recent years, more people have been buying scratch cards, while fewer tickets are being sold for the traditional jackpot drawings. About 30 percent of all draw ticket sales go to charitable groups, while only about 10 percent of the sales of scratch cards reach good causes.

A Camelot spokesman said that the company actually has a strong track record for charitable giving, though he also acknowledged that the firm knows there is room for improvement.

“During the third license period, annual returns to good causes have been, on average, 30 percent higher than under the previous license,” the spokesman said. “We’ve already seen some encouraging signs that the initiatives from the strategic review that we carried out last summer are working.”

If concerns about how Camelot is managing the lottery persist, that could lead to trouble when the company’s license comes up for renewal. Newspaper mogul Richard Desmond has already said he will submit a bid for the National Lottery when the opportunity arises again in 2019. The current license expires in 2023.

This is not the first time that Camelot has come under fire over how much money the company is keeping for itself. In 2013, the Canadian-owned firm was accused of exploiting tax loopholes to avoid paying millions of pounds in corporate taxes to the British government.