GC: Spending down on National Lottery in FY2022-23

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National Lottery operations costs totalled at £2.4m, £178,000 less year-on-year. Meanwhile, National Lottery Competition costs came to £19.1m, down from £23.6m from the previous year.

During the financial year, the process to find the fourth National Lottery licence holder came to an end. The licence was awarded by the Commission to Allwyn Entertainment in September 2022, halting former licence holder Camelot’s tenure in its tracks.

A legal battle over the licence process was launched by Camelot after Allwyn was named as the preferred applicant in March 2022. This was withdrawn the following September.

Total fines and regulatory settlements

During the year, operators paid £20.9m ($26.2m/€24.3m) in fines. A total of £39.2m in regulatory settlements was also paid, bringing the total to £60.1m.

The year saw the largest regulatory settlement ever recorded issued to William Hill Group, amounting to £19.2m. The second-highest regulatory settlement was also recorded during the year, against Entain for £17.0m.

A total of 24 operators saw enforcement action during the period. Five operating licences and one personal management licence were also suspended.

Gambling Commission CEO Andrew Rhodes

Increased remuneration for Rhodes

Also noted in the report is the remuneration paid towards the Commission’s senior managers, including CEO Andrew Rhodes. Rhodes was paid between £255,000 and £260,000 for the financial year.

When focusing on the higher end of that scale, this would be an increase of 48.5% approximately year-on-year.

The Commission’s financial year ended weeks before the Gambling Act Review white paper was finally released, instigating a new era for gambling regulation in the UK. Following its release, Tim Miller, executive director for research and policy at the Commission, said the regulator would have “very little space” to consider non-white paper related policies in the years to come.

In the full-year report, the Commission noted that the white paper’s impact on the industry remains to be seen.

“The medium to long-term impact of the Gambling Act Review white paper on the industry is not yet clear, but we will continue to review this and the potential impact on our future income,” it read.

Income shoots up year-on-year

The report analyses the Commission’s performance over the year, as well as operator statistics and financial results.

The Commission recorded £26.0m in income from fees and other sources for the year, up by 28.8%.

This consists of £22.8m in operator annual licence fees, £2.0m in operator application fee income, £760,000 in fees for personal licences and £390,000 in miscellaneous income.

Expenditure declines 9.3%

Turning to costs other expenditure added up to £20.9m for the year. This consisted of various costs, including professional fees, research costs and external legal fees. Staff costs totalled at £19.0m.

The Commission spent less on the National Lottery compared to the previous financial year

The remaining costs were made up of interest on pensions liability, depreciation and amortisation and final lease depreciation. In total, costs for the quarter were £40.9m, a fall of 9.3%.

After considering expenditures, the net expenditure for the year totalled at £14.8m, an improvement on the £24.9m net expenditure recorded in 2021-22.

Interest and finance costs resulted in a positive contribution of £340,000. After considering other comprehensive expenditure, which was £23,000, the net expenditure for the year was £14.4m. This was an improvement of £10.5m yearly.

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