New National Lottery operator Allwyn must do more to protect players from gambling harm while “restoring the link” between buying a ticket and supporting worthy causes, MPs have said.
A lack of awareness could lead to public calls for a boost to prizes at the expense of returns to good causes and pose “existential questions about the future of the Lottery”, the Department for Culture, Media and Sport Committee (DCMS) report warned.
The committee also called for Allwyn to make a greater financial commitment to the GambleAware charity to support those at risk of harm from gambling, while Lottery products should signpost support services.
The recommendations follow an inquiry into the Gambling Commission’s competition to award the next operating licence.
The Gambling Commission confirmed in September that Allwyn Entertainment, which runs lotteries in Austria, the Czech Republic and Greece, will gain the latest National Lottery licence from February 2024.
In March, the regulator first announced that it would hand the licence to Allwyn, ditching Camelot after 30 years.
Camelot launched legal proceedings a month later challenging the decision, claiming the commission got the decision “badly wrong”.
The commission asked the High Court to overturn the automatic stay-put order on the handover due to the legal case, warning of the disruption it could cause to the lottery.
In late June, the court agreed to lift the suspension preventing it from beginning the licence transfer, but this was then appealed by Camelot
However, Camelot and rival IGT later confirmed they dropped their action through the Court of Appeal.
The DCMS Committee report concludes the competition was “poorly managed”, noting it was concerned by reports that up to £600 million may be diverted from the good causes budget due to the decision by Camelot to pursue legal action.
It said Camelot had faced growing criticism in recent years amid National Lottery draw-based ticket sales and donations to good causes falling as profits rose.
The report said 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, the committee said.
DCMS Committee chairman Julian Knight 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.”
A Camelot spokesman said: “The report is incorrect to claim Good Cause returns are falling. In each of the last two years, Camelot has generated the highest-ever returns to Good Causes from ticket sales in the history of The National Lottery, with annual Good Cause returns now £530 million higher than they were at the start of the third National Lottery licence back in 2009.
“We wrote to the Committee to confirm we would be happy to appear once the competition – and then the subsequent litigation – had concluded.”
A Gambling Commission spokesman said: “We remain resolute that we have run a fair and robust competition, and that our evaluation has been carried out fairly and lawfully in accordance with our statutory duties. In order to protect the integrity of the process, we will not be able to discuss the specifics until litigation has concluded.
“We trust the committee will be pleased to note that we are already committed to vigilant monitoring of the Fourth Licence and its Returns to Good Causes, as well as a full review of our licence competition design process which we will be happy to update the committee on in the future.”
Allwyn said in a statement: “Allwyn has committed to reinvigorating the National Lottery under the Fourth Licence, refocusing on safer draw-based games and ultimately ensuring that there is a far stronger link between players, good causes and local communities.
“Allwyn’s focus will be on growing good causes returns over the course of the 10-year licence, in a safe and sustainable way.
“We want to show the National Lottery can be a benchmark for the wider gambling industry on how best to protect participants in today’s digital world.”