UK Gambling Commission Exploited Lottery Ticket Sales, Says Duncan Smith

There has been much ado about The National Lottery in recent times, not least the fact that the next licence to it has been acquired by the Allwyn brand, which will begin operating it in 2024. And while that operator has proclaimed that it will breathe “new life” into the lottery of the United Kingdom, there is little it can do with regard to claims over the UK Gambling Commission of late.

The Mail on Sunday revealed that the Commission went ahead with awarding itself £50 million more than it had budgeted, as a way of covering administration costs. Yet the fact that that money was supposed to be given to cash-starved charities and other good causes across the United Kingdom has angered many. Not least, Sir Iain Duncan Smith, the former leader of the Conservative Party, has struck out at the Gambling Commission, labelling its decision to proceed with such a move as “appalling”.

After the regulatory body chose to pocket £154.8 million from the sale of lottery tickets across the UK, Duncan Smith, who also serves as the Vice-Chairman of the All-Party Parliamentary Group for Gambling-Related Harm (APPG), said that the way the lottery is currently run is terrible. “The proportion of funds going to good causes has plummeted”, he commented. In response to this, Andrew Rhodes, the chief executive of the Commission, said that the more than £150 million figure had been taken to regulate the lottery for the next 10 years.

Rhodes Letter To Public Accounts Committee

While the money collected from lottery ticket sales is generally supposed to support charities and other community groups across the country, Rhodes wrote a letter to Dame Meg Hillier, who serves as the chair of the Commons Public Accounts Committee. In that letter, he insisted that the money taken by the Commission is required so as to regulate the lottery and pay for the recent bidding process that was undertaken for the fourth lottery licence.

Rhodes went on to state that the withdrawn amount by the UKGC was just 0.7% of the £14.5 billion that had been saved for good causes and charities.

“We have made every effort to keep costs low while ensuring that we fulfil our statutory duties and deliver the best possible outcome for the National Lottery”,

a statement from the Commission said. It was also noted that the £154.8 million represents what the regulatory body labelled as “a reasonable investment” when compared with the £80 billion that the 10-year contract handed out to Allwyn is expected to generate when it comes to ticket sales.

Critics instantly branded the move as appalling though, with Duncan Smith leading the charge on this. It comes as just another issue surrounding The National Lottery, following the awarding of the licence to Czech-owned operator Allwyn.

Allwyn Already Under Scrutiny for Ties to Russia

The Allwyn brand is owned by Czech billionaire Karel Komárek, and he has backed his company when it says it intends to cut lottery ticket prices from £2 to £1 all the way through its licensing period (which will run up to 2034). However, despite everything positive that Allwyn has stated it will do, the company came under fire for having certain links to Russia and its energy giant known as Gazprom. This led to Allwyn releasing a statement directed at the people of the United Kingdom, which saw Komárek condemn Russian President Vladimir Putin’s actions in invading Ukraine. It also outlined the current situation of his 50/50 joint-venture between his company Moravske Naftove Doly (MND) and Gazprom to provide an underground gas storage facility in his homeland of the Czech Republic.

The Gambling Commission stated that it was satisfied that no applications had been impacted by the sanctions relating to the conflict in Ukraine. Yet with tactics such as awarding itself an extra £50 million from lottery ticket sales, people are becoming less and less trusting of the regulatory body.

That’s not all, because the Commission is to be taken to court by current lottery operator Camelot. It was stated that Camelot believes the decision to award Allwyn the fourth lottery licence is “badly wrong”, with CEO of the operator, Nigel Railton saying he was shocked over the outcome of the bidding.

In a statement, he wrote,

“we are launching a legal challenge today in our capacity as an applicant for the Fourth Licence because we firmly believe that the Gambling Commission has got this decision badly wrong. When we received the result, we were shocked by aspects of the decision”.

He added that despite having “lengthy correspondence” with the Commission, that the regulatory body had actually failed to provide a response that it deemed satisfactory. This, he said, is why Camelot has to take the UKGC to court.

Accusations Against UKGC Leave It in Negative Light

The Gambling Commission has already had a lot of negative press thrown its way, and this is especially difficult to bear considering that the Government is currently working on a white paper regarding the Gambling Act 2005. The details of this have been pushed back on numerous occasions, with the information now not expected to be released for viewing until May of this year. Prior to this, it was suggested that the Gambling Commission be overhauled entirely, and perhaps even gotten rid of altogether, making way for a new regulatory body that would have much more power.

It would seem that the negative opinions of the Gambling Commission recently (and indeed throughout its time in operation) have not done the regulatory body much help. And it seems to be sinking even further into a pit of serious issues. In January, various MPs were critical of the UKGC for trying to reduce addiction. The APPG launched an investigation into the Commission in 2021, and the findings said that the Commission is “in urgent need of change”, claiming that it is too harsh. It also stated that it is risking the “destruction of one of the world’s best gambling industry’s [sic],” which could lead to it going underground.

While it was requested that certain measures be taken for gambling addiction to be tackled, the APPG believes that the Commission has instead taken a “bullying attitude”, and this is not the way forward. Yet several MPs who are a part of the APPG have also been criticised for accepting freebies from the gambling industry whilst advocating for it in Parliament, too. Despite this not being against the rules, many have seen it as a form of bribery.