Camelot, the UK’s National Lottery operator, has recorded the second best sales figures in its 26-year history running the game after encouraging greater numbers of older people to play online.
The company said that in the six months to the end of September it earned £3.9bn in sales, a 1.7 per cent decrease on the record half yearly revenues that it achieved last year. This was despite an 18 per cent drop in sales in the first two weeks of the spring lockdown when some retailers were closed and customers were told to stay at home.
Nigel Railton, Camelot’s chief executive, said that the robust result had been driven by strategic marketing to persuade players over the age of 45 to play online, including helping those unfamiliar with the internet to set up email accounts in order to sign up.
This had involved bringing forward about £8m of investment that was largely spent on digital products and recruiting 90 people, 12 per cent of the pre-crisis workforce, to help customers learn to play online.
Mr Railton added that sales had also been boosted by advertising around the National Lottery’s Covid-19 relief fund, which has so far distributed £800m to causes such as food banks and those helping people forced to self-isolate during the crisis, making it the biggest financial contributor to Covid-19 support schemes outside of central government.
Camelot increased its marketing spend from £23.6m in the first half of 2019 to £27.2m over the same period this year, while the company’s profits were about 1 per cent of total revenue, it said.
Earlier in the crisis, the Gambling Commission, the regulator, issued guidance to operators tightening rules around advertising and checking customers’ funds after evidence pointed to an increase in vulnerability to gambling addiction during lockdowns.
Matt Zarb-Cousin, director of Clean Up Gambling, said that while the prevalence of addiction to the lottery was low, Camelot had “used their online platform to peddle rapid instant win games, which are also accessible to under-18s who are able to gamble up to £350 a week”.
“These games have more in common with online casinos than lotteries, and act as a gateway to harder forms of gambling,” he added.
Camelot said that it had a “market leading” position in player protection thanks to the nature of its game design and tracking of customer behaviour, and that it had seen no real change in problem gambling rates during the crisis.
The results come at a crucial time for Camelot as the process to decide on the operator for the lottery’s fourth licence term, which begins in 2023, began last month. The group, which has run the lottery since its inception in 1994, has in the past come under fire from MPs for its record on prioritising profits over returns to good causes. It has also been fined by the Gambling Commission for governance failings.
Mr Railton said that Camelot had passed the qualification stage to apply for the next National Lottery licence — one of the most lucrative government contracts put out to tender — and that the group had “exciting plans” should it be chosen.