Matt Vickers is the MP for Stockton South.
Emerging from the shadow of lockdown life, we have all marvelled this summer at the guts and glory of our UK sporting greats. Their haul of 65 Olympic medals followed by Emma Raducanu’s incredible US Open win has given us all a much needed shot in the arm.
Their efforts, matched by long-term funding from the National Lottery, show just what hard work and the necessary financial backing can achieve.
This is why the steady decline in National Lottery good cause spending is such a serious cause for concern.
In 2019/20 lottery contributions to good causes rose by a measly 0.31 per cent despite a whopping 14.32 per cent increase in profits for Camelot, the Canadian owned company, in the same year. Even more worryingly, the OBR has forecast that on current form, total expenditure from National Lottery grants will decrease by half a billion pounds by 2024. Even though gross lottery ticket revenues have increased by £2.5 billion between 2010 to 2020.
Over the same timeframe, the contribution ratio to good causes has decreased from 28 per cent to 23 per cent, representing £2.4 billion of money that could have been paid into deserving UK charities, sports, the arts and volunteer groups, had the contribution ratio not fallen so dramatically over the last decade.
Instead, it has gone into multi-million-pound executive salaries or been sent offshore to the Ontario Teachers Pension Plan fund which owns the current lottery operator Camelot. Just this week it was announced that under long-term incentive plans, senior Camelot executives paid themselves millions of pounds in bonuses.
The drop in good cause spending has been driven in part by Camelot’s controversial and increasing reliance on instant win games and scratchcards to drive sales. Total sales of scratchcards and instant win games increased steadily from £1.4 billion to £3.4 billion, while total draw-based sales remained more or less static.
This is problematic because scratchcards and other instant wins games return just 10p out of every pound spent to good causes, as opposed to the twice-weekly draws (like Lotto) which give 30p per pound.
Camelot looks set to continue pursuing this strategy, raising its marketing budget by £70 million in the past year (taken once again out of funds that would otherwise go to good causes) to help promote scratchcards and instant wins. It is not hard to see why – Camelot is beholden to its shareholders to raise as much profit as possible.
Indeed it made £78 million in profits in 2019/20 and paid out a nice £80 million dividend. Approximately £750 million in total has been paid out in dividends, loans, interest payments and other financial mechanisms since Ontario Teachers’ Pension Plan purchased Camelot. So every time the UK public buys a lottery ticket it really does make amazing things happen – for Camelot and its owner.
The National Lottery was set up to raise money for good causes all across the UK including in places like my constituency in Stockton South – to boost local communities and help bring opportunity to parts of the country that have not had much of it, especially in recent times. That is the lottery’s sole reason for being. So if Camelot is not delivering increased money for good causes, it is not delivering at all.
At a time when the 4th National Lottery Licence is up for grabs and the DCMS Select Committee inquiry looks into “What Next for the National Lottery?”, it seems fair enough to start with the question “What has happened to the National Lottery”?