National Lottery facing £2bn charity shortfall

Telegraph

01-03-2025

The new owner of the National Lottery is set to miss a key funding milestone, casting doubt on the ambitious pledges that were pivotal in the company being awarded the licence.
According to Allwyn's own financial projections, the National Lottery is on course to generate around £1.6bn in donations for charitable causes in its maiden year – more than £2bn short of where returns were expected to be.
Allwyn, which is owned by Czech billionaire Karel Komarek, originally promised to more than double donations from £17.9bn under predecessor Camelot to £38bn – equivalent to £3.8bn a year over the coming decade.
The company later revised its projections, pledging to double returns to good causes by the end of its licence, from £30m to £60m a week – equivalent to nearly £3.2bn a year.
It means Allwyn must generate an average of £4bn annually for the remainder of the licence if it is to fulfil its original undertakings, or £3.3bn a year to meet the amended target.
Concerns about the lottery's faltering performance under Allwyn have been raised in the House of Lords as it struggles to complete a costly and complex IT overhaul. In a parliamentary debate earlier this month, Viscount Chandos asked gambling minister Baroness Twycross whether the Gambling Commission had been 'taken for a ride' by Allwyn during the bidding process.
Allwyn's pledges were already looking 'fanciful now, to put it mildly', he told peers. His comments came after Baroness Twycross confirmed that donations would be in the region of £1.6bn in the first financial year of the fourth licence – an 11-month period from the start of the licence on 1 February to 31 December 2024.
Allwyn has suffered repeated delays to a digital upgrade that it says is critical to plans for a raft of improvements to the lottery, including the introduction of new games expected to boost sales.
The technology transfer was supposed to be in place when Allwyn took over the running of the lottery in February last year but, following a series of hold-ups, it may not be ready until February 2026 – the latest point at which it can be delivered under the terms of the licence.
Senior MPs on the culture, media and sport select committee plan to question Allwyn bosses in the coming months as part of an inquiry that will scrutinise performance. However, Westminster sources say it could be delayed by legal action.
Billionaire Richard Desmond launched a high court challenge in 2022 after Allwyn was awarded the licence over his firm Northern and Shell, owner of the Health Lottery, and the incumbent Camelot. A trial is due to go ahead in October after Desmond rejected a settlement offer, understood to be worth just a few million pounds, in December.
A spokesman for Allwyn said: 'Allwyn is looking to restore the magic to The National Lottery and deliver responsible growth. We are investing £350m into our comprehensive plan to transform it. Never before has The National Lottery changed hands.
'Protecting and maintaining vital returns to good causes in our first year of operation is a success, and only the start of Allwyn's plans to double returns to good causes from £30m per week to £60m per week by the end of the 10-year licence period.'