Big players ready to bet to win control of UK lottery

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Big players ready to bet to win control of UK lottery


Nearly 22 million people watched Britain’s first national lottery draw in 1994, an event broadcast across the country as part of a prime-time television special hosted by Noel Edmonds.

Schoolchildren would emulate his famous advertising campaign, featuring the finger of fate rising from the sky to choose a happy winner, in full swing: “It could be you.

After 27 years, the novelty and the razzmatazz has worn off somewhat. Around 60% of UK adults still play, but increasingly more quietly and solitary, absorbed in one of the 21 ‘instant win’ games on their phones.

Spending caps allow users of the National Lottery app to splurge up to £ 350 per week – £ 18,200 per year – on captivating casino-style features that, for the most part, end in a different slogan: “Better luck next time”. The limit is 75 games per day.

This migration, from simple draw games to a dizzying array of scratch cards and rapid-fire apps, is at the heart of a growing controversy over the future of the lottery.

This week, interested parties will complete their submissions to a survey on the future of the lottery, launched by members of the Digital, Culture, Media and Sport Select Committee (DCMS).

Their intervention is already proving controversial: it comes as the Gaming Commission is in the midst of a twice-delayed competition process to decide who will lead the next national lottery license, a 10-year contract set to begin in 2024.

Camelot, the company owned by the Ontario Teachers’ Pension Plan – a giant Canadian investment fund – has won all three licensing competitions to date, but seems more at risk than ever of losing the job. .

The incumbent faces stiff competition from three challengers: Czech group Sazka, media mogul Richard Desmond and Italian lottery operator Sisal.

With a quartet of complex offers to analyze, Acting Gambling Commission boss Andrew Rhodes wrote to DCMS select committee chairman Julian Knight, informing him MPs had chosen an inappropriate time to launch their investigation. . The licensing competition was governed by strict confidentiality rules, he said, making it difficult for anyone involved to testify in public.

Knight responded in the strongest terms, warning that the committee’s reluctance to face MPs “sets a dangerous precedent for democracy.”

A rapprochement has since taken place, according to sources on both sides of the line, the commission stressing that it does not refuse to appear, but is content to highlight the difficulty of facing a public grilling on a process confidential.

Nonetheless, the spat underscores how concerns about its leadership have brought the national lottery to a crossroads.

Noel Edmonds presented the first national lottery show in 1994. Photograph: Richard Baker / In pictures via Getty Images

At the heart of questions about its future are hard numbers. Camelot has been the subject of criticism, including a report by the Parliamentary Public Accounts Committee (PAC) in 2018, that charitable giving has not always grown as fast as profits.

In the first year of the current lottery license, Camelot made an after-tax profit of £ 31.5million after selling £ 5.45bn of tickets, raising over £ 1.5bn sterling for good causes. In the year that PAC thus exercised, 2016-17, Camelot’s profit was more than twice as high at £ 70million, but it only raised a little more for good causes , around £ 1.6 billion.

Since then, Camelot has rebalanced things somewhat. Profits for the year through March 2021 are expected to reach nearly £ 80million, but that is on account of record sales of £ 8.37bn, with money for good causes also reaching a level record, of £ 1.85 billion.

What matters most, says Camelot, is that the annual sum raised has increased in absolute terms by £ 350m, while the cumulative total already exceeds £ 43bn.

Still, it is undeniable that the company’s profit as a proportion of ticket sales increased from 0.6% to around 1%. Part of this is due to the appetite for those compulsive instant games and scratch cards. Growth in traditional ticket sales has been weak since 2010, from £ 4.1bn to £ 4.7bn, despite a price hike of £ 1-2bn. Meanwhile, the combined sales of scratch cards and online instant games have grown from £ 1.3bn to £ 3.36bn.

The percentage of the bettor’s stake that goes to good causes is between 28% and 34% for draws, but only 12% for snapshots and 9% for scratch cards.

The operator says the difference is due to the fact that a higher proportion of each bet on a scratch card or instant win game must be allocated to the cash prize. Unlike a weekly raffle, which could make you a millionaire, Instant Win products are only attractive to customers if they pay regularly, even for small amounts. More engaging games mean higher sales, and therefore more overall money for good causes, the company says.

However, the changing trends of lottery gambling raise other concerns. Instant win games alone have hit sales of £ 1 billion during the pandemic, a source told a national newspaper earlier this year.

This trend has fueled doubts about the risk of addiction posed by quickfire products, which have more in common with frequently criticized online casino games than with a lottery draw.

This is a particularly hot topical issue, occurring amid a government review of gambling regulations that arose out of a wave of public concern about addictive products.

Labor MP Carolyn Harris, who heads an all-party parliamentary group examining the harms of gambling, takes a dim view of Camelot’s penchant for instant win games.

“They’re one of the worst ways to get kids to gamble, using the premise that it’s for charity,” Harris said.

She points out that while the minimum age for playing the national lottery was raised to 18 in April this year, prior to that, Camelot allowed 16-year-olds to open an account to play instant win games. , even though online casino companies imposed an age gates to block under-18s. This, she said, had “tainted the mark” of the lottery.

“I hope whoever gets it next will have more moral integrity than Camelot,” she said.

“When it comes to encouraging young people to play, they are no better than any other gaming organization.”

Camelot lottery ticket holders have become a familiar sight in supermarkets and corner stores. Photograph: Andrew Milligan / AP

Camelot points out that the age limits are set by the government and that it applied the 18+ classification earlier than expected. A spokesperson said that “the inherent risk of problem gambling associated with national lottery products is very low – a fact confirmed by the Gambling Commission and [gamblers’ charity] GamCare data ”.

Given the atmosphere of secrecy surrounding the licensing contest, it’s hard to determine what the Camelot challengers would do differently.

In theory, suitors are not allowed to talk about their plans – one of the reasons the Gambling Commission is wary of public hearings by a select committee. In practice, they are not averse to offering a glimpse behind the curtain.

Some have latched onto concerns about instant win games, professing their eagerness to return to raffle-based gaming, despite being marketed to a larger base of people in more places, on more occasions. .

A figure involved in the auction process asked, “Why can’t Amazon and Deliveroo sell lottery tickets? Why can’t you buy a lottery ticket at a Costa or Starbucks? You are sitting down having a coffee, why can’t you play the lottery then?

“It’s about changing the focus on instant win to make it less like slots and more fun, like a Christmas present. “

Others say Camelot hasn’t invested enough in the technology, despite the £ 250million in capital spending it made during the current license term.

One bidder made a deal with a tech company that would involve replacing counter scratch card cases and lottery kiosks that you find in supermarkets and convenience stores.

Instead, stores would have electronic terminals capable of recognizing a lottery player’s phone, signaling them when they were some distance from the terminal with a reminder to play.

It’s unclear how the Gambling Commission, already under pressure from addiction, will see the appeal of phones that push you to gamble, or lottery tickets sold with cups of tea and coffee.

Final offers are due in mid-October, with the winner to be announced in February of next year. The finger of fate awaits.

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