Camelot pledges to ‘invest and innovate’ around National Lottery despite losing license

National Lottery operator Camelot has promised to continue to “invest and innovate” around the brand “to respond to the changing consumer environment”, despite losing its bid earlier this year to extend its licence beyond 2024.

Reporting its full year financial results today (28 June), Camelot claims to have achieved ticket sales of almost £8.1bn over the year to 31 March – only the second time in the history of the National Lottery ticket sales have broken the £8bn mark.

While a decrease of £283m on last year’s record sales of £8.3bn – which Camelot pins on the effects of the worsening cost of living crisis – the organisation achieved its “best-ever” returns to good causes from ticket sales alone for the second consecutive year.

Including unclaimed prizes, £1.91bn was generated for good causes over the period, an increase of £24.3m on last year. This marks the second highest total raised for good causes by the lottery in its history, exceeded only in 2012/2013 when there were significantly more unclaimed prizes. It is only the third time the good causes money generated has exceeded £1.9bn.

“Achieving National Lottery sales of over £8bn 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,” says Camelot CEO Nigel Railton. 

“It’s also testament to the resilient, innovative and responsive business model that we’ve put in place over the last few years.”Allwyn beats Camelot to National Lottery licence with pledge to ‘revitalise’ brand

In particular, Railton highlights the business’s “ongoing investment” in the National Lottery brand.

In July last year Camelot launched the National Lottery’s biggest-ever brand campaign for Tokyo 2020, to remind consumers that money raised through the lottery directly supports Team GB and ParalympicsGB. Camelot claims the campaign “boosted” sales performance over the first half of the year, “enhanced” brand positivity and “significantly” increased awareness of the lottery’s funding of sport.

The National Lottery has also supported a number of initiatives to boost the entertainment, sport and tourism industries post-Covid, including giving away almost 60,000 live music tickets to National Lottery players, as well as £25 off top attractions and experiences in the UK.

To celebrate the Platinum Jubilee, the brand launched The National Lottery’s Big Jubilee Street Party on ITV over the bank holiday weekend, to ensure it remains “front of mind at key national moments”.

Retail vs digital sales

Meanwhile, with almost 60% of sales still taking place through retailer partners, retailer satisfaction hit a 10-year high this year, Camelot claims.

To drive greater distribution and convenience, Camelot developed bespoke solutions for the likes of Aldi and Iceland, as well as making National Lottery tickets available at self-checkouts in Asda. The lottery now has over 19,000 points of integrated distribution in these retailers.

The business has also worked with Tesco, Asda and Morrisons to offer scratchcards on their ecommerce platforms for home delivery or click-and-collect.

However, sales of National Lottery Instants were down £240m year-on-year to £3.4bn, accounting for the majority of sales decline. Camelot attributes this to greater competition for attention and spend after the lifting of Covid restrictions, followed by growing economic uncertainty.‘Keep it simple’: Camelot’s Keith Moor on the secret to being an effective marketing leader

Digital sales fell £93m to £3.4bn for similar reasons, alongside the introduction of lower online play and wallet limits for potentially at-risk players.

Nevertheless, Camelot claims have seen “strong” retention of players who migrated from retail to digital over the pandemic and built on this with some “highly effective” acquisition activity, which resulted in 1.8 million new player registrations over the year. The National Lottery’s digital player base now amounts to a record 10.1 million active players.

Railton adds: “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.

“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.”

Launched in 1994, the National Lottery is one of the world’s largest lotteries. Camelot has held the licence for the service since then, but its current and third licence is due to expire in 2024.

The Gambling Commission has named European lottery operator Allwyn its “preferred applicant” for the fourth National Lottery licence. In a statement, Allwyn said its proposal aims to increase returns to good causes by “revitalising” the National Lottery in a “safe and sustainable way”.

“We will do this by rekindling the meaning The National Lottery has for each of us, whether as individuals or as part of the communities we live in; whether we play The National Lottery or not,” said British entrepreneur Sir Keith Mills, who led the Allwyn bid.

Camelot is in the process of legally challenging the Commission’s decision.

Last year, Marketing Week columnist Mark Ritson identified Camelot’s turnaround strategy for the National Lottery as the “perfect example” of a successful brand revitalisation. The business lost focus in 2017, with brand tracking showing national positivity towards the service was in consistent decline and ticket sales were falling. Compared to 2016, sales were down by £600m. Follow The National Lottery’s example: Don’t rebrand, revitalise

According to Ritson, this decline was a result of a shift towards promoting a player’s personal potential to win money, rather than the National Lottery’s function in British culture as a provider of funds to good causes.

However, the business successfully turned this decline around. New CMO Keith Moor, who joined Camelot in 2019, shifted the focus back towards the lottery’s contribution towards society and good causes, increased marketing investment and moved advertising spend from short-term, product-based activity to building a narrative around the brand.

As a result, Camelot won the award for Long-Term Brand Building Excellence at the Marketing Week Masters last year. Moor was also revealed as Marketer of the Year.