UK lottery operator Camelot’s sales drop as cost of living crisis bites

UK National Lottery operator Camelot has posted a year-on-year decrease in annual sales, as the cost of living crisis cuts into consumers’ disposable income.

Camelot, which is challenging the Gambling Commission’s decision to award the next lottery licence to rival operator Allwyn, on Tuesday said it generated £8.1bn in sales in the year to March 31, down 3.4 per cent from the previous year’s record of £8.3 billion (€9.61 billion).

The company pinned the worsening sales performance on a 6.6 per cent decrease in sales of online instant games, which it said was largely due to “greater competition for people’s attention and spend after the lifting of Covid restrictions” and “growing economic uncertainty over the latter part of the year”.

Sales across the 44,500 retailers that sell its tickets fell 3.9 per cent year on year to £4.6bn, against a backdrop of challenges caused by the Omicron Covid variant in early 2022 alongside “the cost of living crisis slowing down retail recovery as consumers tightened their belts”, the company said.

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Camelot, which has run the lottery since its inception in 1994, has been awaiting the judgment on its legal challenge last month, which if successful would stop the handover of the National Lottery getting under way.

It argued over a two-day court hearing that the Gambling Commission should not have discounted a “risk factor” score to the bids, as it unfairly favoured the more ambitious but potentially risky business plan of Allwyn.

Allwyn, Europe’s largest lottery operator with operations spanning the Czech Republic, Italy and Greece, pledged higher returns for good causes from the lottery and said it would halve ticket prices to £1.

However, the successful bid from the Czech company, which was previously known as Sazka, was met anxiety from MPs from across the political spectrum, who were concerned by its owner Karel Komarek’s links to Russian state-controlled gas group Gazprom through a joint business venture.

The company raised a record-high £1.9 billion for good causes from ticket sales over the course of the year, “at a time when The National Lottery has faced uncertainty on a number of fronts”, said Sir Hugh Robertson, Camelot chair.

Nigel Railton, Camelot chief executive, said in a statement: “In the year ahead, we’ll continue to invest and innovate to respond to the changing consumer environment because we all care deeply about the future of The National Lottery — and the vital difference that it continues to make to the whole of the UK.” - Copyright The Financial Times Limited 2022