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Lotteries/Camelot: UK’s Czech mate overturns under-rewarding operator

March 19, 2022
in Companies
Reading Time: 2 mins read

The odds of a jackpot are tilted just as heavily towards lottery operators as they are tilted against punters. In many countries, operators never lose their licences. The Gambling Commission is nevertheless stripping Canadian-owned incumbent Camelot of the right to run the UK’s National Lottery. For the first time in 28 years, a new operator is scheduled to take over, the Czech Republic’s Allwyn.

By 2020, the National Lottery had become the world’s fourth largest lottery with revenues of over $10bn, according to data from consultants Global Betting and Gaming. It has been a highly lucrative business for Camelot. But the decision partly swung in Allwyn’s favour from its pledge to donate more on average to charity.

It would be the first top tier operator to lose its licence since 2007. The customer payout ratio, at 57 per cent in 2020, was below average among the top 10 lotteries. Compare that with a payout ratio of 74 per cent for Italy’s National Lotteries.

Camelot was one of a minority of top 10 lotteries that expanded its revenues in 2020. Business has slowed for all lotteries in recent years. Netting off prize money, gross gambling yield has travelled sideways since 2011. The willingness of the licensers of lower-tier state lotteries to change operators may be spreading up the size ranking.

Online sales, which Camelot championed, have been slow to take off. Last year, online lottery ticket sales made up 42 per cent of the UK total. That compares with just 5 per cent in North America, note analysts at H2 Gambling Capital.

That may have less to do with technology aversion than the reticence of local watchdogs to take business away from small, mom-and-pop stores. These often rely on lottery tickets to bring in customers. Experts believe online sales may soon start to motor.

The tale may yet have a happy ending for Camelot. It plans to mount a legal challenge to handing over its franchise in two years’ time. Its chances of success are higher than the odds of 45m to 1 that stand in the way of a UK jackpot win.

City Bulletin is a daily City of London briefing delivered directly to your inbox as the market opens. Click here to receive it five days a week.

Source: Financial Times

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