UK retailers concerned over future of National Lottery

Amid the UK’s tender for the next National Lottery licence, traditional bricks and mortar outlets are concerned about the increased emphasis on digital.

UK.- Newsagents in the UK are expressing concerns about the future of the National Lottery as the Gambling Commission proceeds with the fourth licence tender.

When the National Lottery launched in 1994, the only way to buy a ticket was in person at a newsagent or convenience store. Camelot, which has run the lottery since its inception, passing through three licence periods, has since introduced digital sales, but lottery sales remain of huge importance for retail outlets.

Brick and mortar sales continue to account for the majority of National Lottery tickets sold, but digital is fast catching up. 

Accelerating digital lottery sales

For the 2019 to 2020 financial year, before the full impact of the Covid-19 pandemic was seen, digital sales already hit  £2.46bn, up 34 per cent year-on-year. Mobile sales rose 57.5 per cent year-on-year to £1.61bn.

With Allwyn, Sisal and Sugal & Damani now competing for the fourth licence to run the National Lottery, newsagents fear that a new operator will aim to accelerate online and app sales.

Allwyn in particular is believed to be putting a strong emphasis on digital transformation in its bid. It’s signed up Twitter’s UK MD Dara Nasr to advise on the digital commerce side of its bid.

The trade magazine The Grocer reports that close to half of convenience retailers (44 per cent) say the National Lottery is more important to their business than ever.

Some 44,000 retailers work with Camelot and earn a commission of around 5 per cent on tickets for National Lottery draws. Camelot says retailers earned an average of £7,000 in commission in 2019/20.

Jason Birks, deputy VP at the National Federation of Retail Newsagents (NFRN), said: “Currently, the National Lottery does have an online presence but I’ve heard that some of the bidders want to do a lot more online and from a high street point of view, and from the point of view of community-based retailing, we need to protect bricks and mortar.

“Those in government need to not only view online as the ‘trendy’ thing to do but bear in mind that people still like to visit bricks and mortar retailing.”

However, one independent retailer told The Grocer: “I don’t think Camelot deserves another licence as for the last few years they have been very average with limited innovation, mediocre support for retailers with too much red tape.

“A new licensee should create a fresh approach and more energy.”

Camelot commits to retail outlets

Camelot said: “We fundamentally believe that The National Lottery’s success – which culminated in record sales last year – is reliant on building and maintaining a healthy retail channel.

“That’s why we’ve invested heavily in retail at the same time as growing the largest digital lottery channel in the world by revenue.

“While we’re unable to share specific details of our bid, we can say that Camelot’s philosophy remains the same – with retail being a cornerstone of our strategy.

“National Lottery retailers have been fantastic partners to us over the past 27 years and, as they’ve always been there for us, they can expect our continued support.”

The Gambling Commission is set to announce its preferred bidder to run the National Lottery from 2023 in the next six months.