Camelot launch strategic review after disappointing lottery sales


camelot-national-lottery-strategic-reviewUK National Lottery operator Camelot has launched a strategic review following annual sales declines in its marquee product.

On Wednesday, Camelot announced that National Lottery ticket sales in the 12 months ending March 31 totaled £6.92b, the fourth-best result since 1994 but an 8.8% decline from the sales total in Camelot’s 2015-16 financial year.

Camelot’s decline was broad-based, with retail sales down £606.6m to £5.4b, while digital (interactive and subscription) sales were off £63.3m to £1.52b. Mobile sales were an outlier, rising £23.8m to a record £619.3m.

As a result, Camelot has launched a strategic review of its National Lottery operations, with a focus on coming up with a plan to boost sales, studying its investments in technology and systems, the current business structure and long-term succession. Camelot says it will offer an update on this review when it turns in its fiscal H1 results later this year.

Camelot Chairman Jo Taylor said achieving the fourth-best results in the company’s history was “no mean feat” but the 2016-17 sales figures were “well short of where we’d like them to be.” Taylor also warned that the turnaround wasn’t likely to be immediate, so investors should expect “a further sales decline this year.”

Taylor said the 2016-17 shortfall was primarily due to declines in “draw-based games and Lotto in particular.” Taylor said a key portion of the review would be finding ways to “re-engage players.”

Camelot has endured a number of own-goals over the past year, including a wonky mobile app, the hacking of its National Lottery website and a £3m fine for paying a fraudulent jackpot claim.

Camelot is also under siege from external antagonists such as lottery betting operator Lottoland, which has publicly criticized Camelot’s “antiquated” product offering. In response, Camelot lobbied hard for UK regulators to clip Lottoland’s wings for infringing on its lottery monopoly turf, leading the UK government to announce a review of “prohibiting third party betting on UK EuroMillions Draws” this spring.

Lottoland shows no signs of letting up on its expansionist ambitions, having just announced its first B2B deal with the Kindred Group, the parent company of Unibet and numerous other online gambling brands, whose customers can now avail themselves of Lottoland’s products directly through Kindred sites.

In related news, the UK’s Advertising Standards Authority has spanked the Health Lottery for running a TV commercial in which a man urged people to purchase lottery tickets because “you’ve a very good chance of winning.” The ad sparked 12 complaints based on what viewers saw as the Health Lottery misleadingly exaggerating the chances of winning a prize.

The Health Lottery argued that (a) the man’s claim was not scripted and (b) the phrase “a very good chance” was subjective. The ASA rejected these arguments, saying viewers were likely to interpret the man’s claim as factual, and that his claims weren’t supported with documentary evidence. The Health Lottery was ordered not to run the ad again.