Regulator hopes tech giants will bid for UK Lotto contract

16 November 2018

The UK Gambling Commission is beginning the search for potential new bidders for the next National Lottery licence.

The current licence, held by Camelot, expires in 2023, but bidding for the franchise will begin next year.

The Financial Times reports that Neil McArthur, the chief executive of the Gambling Commission, is keen to attract a wide range of bidders after previous competitions since the Lottery was launched in 1994 failed to generate wide interest. Camelot has operated the lottery since its founding, winning tenders in 1994, 2001 and 2007, and having its deal extended in 2012.

McArthur said it was important that his organisation, which now runs the bidding process after it merged with the National Lottery Commission in 2013, takes into account changes in consumer engagement with lotteries.

“It is increasingly moving towards tech-based, media-based, personal device-based,” McArthur said, according to the Financial Times. “We want to find out what’s interesting to finance providers and technology providers to get the broadest possible input.

“Technological innovations offer a lot of opportunities in that space because you have a lot more information about your players. You can see what they’re doing and you can give them tools to help themselves manage their gambling.”

McArthur said there was “significant untapped potential” in the franchise. “That’s part of the reason we want to cast the net so wide,” he said.

This week Camelot UK Lotteries announced a 5.4% increase in sales for the first half of its financial year, aided by a strong performance from its draw-based games.

Total sales for the six months ended September 29 rose to £3.5bn, aided by growth across all product lines.

While retail still accounts for 75% of all Camelot sales, digital continues to grow, setting a new sales record of £831.4m for the reporting period. This was driven by a broader range of games, and the launch of a mobile app for Android devices. This helped mobile sales grow 30% to £431.6m, with the channel now accounting for more than 50% of all digital sales.

Chief executive Nigel Railton said that while the strategic review, launched in June 2017 as a result of slower-than-expected sales growth and a decline in draw-based game sales, had had a positive initial impact, efforts would be taken to further grow the business.
Camelot, which is owned by Canada’s Ontario Teachers’ Pension Plan, was fined more than £1m in August for failings that included a mobile app glitch and direct debit errors.

Last year it was suggested that Northern and Shell, the publishing group owned by former Daily Star owner Richard Desmond, intended to prepare a bid.