Camelot is set to raise £2.6bn less than it promised for good causes in the current National Lottery licence and will be nearly £1bn short of the amount it raised in its first licence, according to a Financial Times analysis.
This assessment comes ahead of the National Lottery Commission’s decision this summer on whether the company should be awarded the third licence, which would last 10 years.
The shortfall puts further pressure on charities whose support is being hit by the government’s decision to divert more lottery income to pay for the London 2012 Olympics.
The amount raised for good causes is the key criterion for the commission’s decision. However, Camelot is still expected to defeat its sole competitor for the third licence, Sugal & Damani, which operates lotteries in several Indian states.
Camelot maintains it is confident of raising £10.5bn for good causes in the current seven-year licence period, matching the amount it has raised, net of interest payments, in the first. But it declined to elaborate, saying it would not divulge future projections. It would also not comment on whether its calculations for the second licence included interest payments.
Camelot’s second licence bid was notable for the war of words with rival Richard Branson’s People’s Lottery. Both promised £15bn for good causes.
A National Audit Office report on the bidding process said the actual Camelot offer was to raise £12.2bn. But after the licence was won, Lord Burns, then commission chairman, said Camelot would do well to raise £10.5bn.
In spite of a sales increase in each of the last three years, contributions have so far totalled £5.7bn, with less than three years left. Camelot gives 28 per cent of its income from lottery ticket sales, plus all proceeds from unclaimed prizes, to good causes.
Based on the returns from the first three-quarters of this financial year, sales for the full year would be close to matching last year’s £5bn.
Were Camelot to maintain that level for the rest of the licence period, contributions to good causes would total £9.6bn, £900m less than in the first licence.
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