National Lottery ticket sales are flatlining under the new licence holder Karel Komarek in a blow to the Czech billionaire’s hopes of raising more money for good causes.
Ticket sales fell 1 per cent in the three months to June compared with a year earlier. It is the first full quarter since Komarek-owned Allwyn formally took control from Camelot, according to figures shared with its lenders.
Allwyn only discloses revenue figures, which increased by 4 per cent to €1 billion because sterling has strengthened against the euro. Adjusted earnings, meanwhile, plunged 92 per cent from €50 million to €4 million during the quarter as Allwyn also paid the price for an “unusually high level of prize payouts in the quarter”.
Allwyn formally took over the running of one of Britain’s biggest public sector contracts in February after pipping incumbent Camelot to the fourth National Lottery licence.
With an estimated fortune of $9.6 billion, Komarek is one of the Czech Republic’s wealthiest individuals, having started out in the oil and gas sector during the 1990s following the fall of communism.
At the heart of Komarek’s bid was a pledge to increase money raised for good causes. The operator’s profitability is linked to delivering on this promise. This means that when it fails to grow ticket sales, profitability declines more rapidly than in previous years. Conversely, if sales — and therefore amounts raised for good causes — beat targets, Allwyn is financially rewarded more handsomely.
Allwyn, led in the UK by the former music executive Andria Vidler, has been thwarted from introducing new games because it is operating on the previous licensee’s technology.
Switching to a new tech platform has been delayed by a protracted legal challenge by previous provider IGT into the awarding of the fourth National Lottery licence to Allwyn.
Nevertheless, the company told bondholders that it plans to invest heavily to “transform the UK National Lottery” in future quarters.
Allwyn also wants to increase sales of scratchcards by encouraging people to give them as presents, as is commonplace in parts of Continental Europe. The operator launched a “best gift ever” advertising campaign earlier this year.
The National Lottery has raised £49 billion for good causes in the 30 years since it launched, equivalent to roughly £30 million a week. Allwyn wants to double this to £60 million a week under its stewardship.