People have been tightening their wallets following COVID-19 restrictions

By Kate Northrop

The UK National Lottery is taking a financial hit amidst the "growing economic uncertainty" that is leading players to hang on to spare change that might otherwise be spent on tickets.

Last week, the National Lottery announced that it is reporting its best-ever returns to good causes for the second consecutive year, despite seeing a significant dip in ticket sales.

For the second year running, the Lottery generated over £8 billion (US$9.53 billion) in revenue and this year raised £1.9 billion (US$2.26 billion) for good causes.

"Achieving National Lottery sales of over £8 billion two years in a row while maintaining very high levels of public participation — despite the challenging and changing external environment — proves that our strategy of offering great consumer choice in a safe and convenient way continues to be hugely successful," Camelot CEO Nigel Railton said in a press release. "It's also testament to the resilient, innovative and responsive business model that we've put in place over the last few years."

Despite the record-equaling finish for the fiscal year, instant games, the core product that makes up the majority of lottery sales, saw a £240 million (US$286.15 million) decline down to £3.44 billion (US$4.1 billion).

"This was largely down to greater competition for people's attention and spend after the lifting of Covid restrictions, followed by growing economic uncertainty over the latter part of the year," Camelot said.

Changing shopping habits and online sales of Instant Win Games, Camelot explained, kept scratch-off sales at pre-pandemic levels. The lottery operator had additionally introduced lower play and wallet load limits for potentially at-risk players to promote healthy play, which they said accounted for the decline.

Fewer big EuroMillions rollovers also meant fewer people buying scratch-off tickets as spontaneous purchases to add on to their draw game buys.

In the latter part of the year following the lift of COVID-19 restrictions, retailers saw less foot traffic and decreased shopper frequency as a result of "the cost of living crisis slowing down retail recovery as consumers tightened their belts."

The Lottery reports that retail, with a network 44,500 locations-strong, still reigns as the largest sales channel, making up nearly 60% of sales this year.

That's not stopping the National Lottery from looking at other non-traditional means of selling their products. Camelot recently partnered with Tesco, Asda, and Morrisons to offer a range of scratch-off games on their websites for home delivery or click and collect.

While digital sales channels are becoming ever-more relevant, scratch-off sales were not the only lottery product in Camelot's repertoire to take a hit. The Lottery found that, despite having a record number of people playing online between 2021 and 2022, this year's digital sales of £3.42 billion (US$4.07 billion) were £93 million (US$110.9 million) lower than last year. Mobile phones still continue to be the digital play method of choice for lottery players, with sales on smartphones and tablets accounting for 72% of all digital sales.

"My 1,000 Camelot colleagues and I are incredibly proud of what we've built: a strong, resilient business and a huge UK brand that brilliantly connects The National Lottery's unique purpose with play," Railton continued. "In the year ahead, we'll continue to invest and innovate to respond to the changing consumer environment because we all care deeply about the future of The National Lottery — and the vital difference that it continues to make to the whole of the UK."