UK National Lottery Seeking Bidders for a New License

Lottery balls against a white backgroun

The UK’s Gambling Commission is looking for bidders who would like to take on the next National Lottery license. The commission’s chief executive has said bidding for a new license to run the National Lottery will begin early next year.

Hoping for diverse bidders

The National Lottery license is regulated by the UK Gambling Commission (UKGC) and is open for bids for the license to be reassigned in 2019. The UKGC is hoping to attract a diverse range of bidders to take the franchise forward, including tech and finance firms. In previous years, the license has not drawn much interest from bidders, but the commission is hoping to attract more variety for the next cycle. The current license expires in 2023.

Neil McArthur, the UK Gambling Commission’s CEO, said the way the general public participates in the National Lottery is changing. Speaking ahead of the World Lottery Summit, he said: “It is increasingly moving towards tech-based, media-based, personal device-based. We want to find out what’s interesting to finance providers and technology providers to get the broadest possible input.” The National Lottery makes around £3.3bn ($4.2bn) in gross gambling yield, making it one of the most profitable national franchises that can be bid upon by private companies. It is the fourth biggest lottery in the world.

Potential for growth

Neil McArthur, who took over as chief executive of the UKGC last year, said there was “significant untapped potential” in the lottery franchise, which is part of the reason they “want to cast the net so wide.” The new license will be the first time the Gambling Commission will run the bidding process, now that it has merged with the National Lottery Commission.

“The world’s [become] a very different place, even during the life of this license,” said McArthur. “Consumer behavior, technology, and communications have moved substantially.” New technology has the potential to overhaul the way that people play the lottery, particularly when it comes to problem gamblers.

“Technological innovations offer a lot of opportunities in that space because you have a lot more information about your players. You can see what they’re doing, and you can give them the tools to help themselves manage their gambling,” he said. The National Lottery has been run since 1994 by Camelot, which is owned by Canada’s Ontario Teachers’ Pension Plan.

Concerns about performance

Claims of underperformance complicated Camelot’s last bid for the National Lottery. McArthur has acknowledged the underperformance, saying, “There have been some areas where their performance has not been what we would have expected. My concern is to run a competition that is scrupulously fair for all those involved.” He had no further information about whether or not Camelot will be bidding to renew its license.

The UKGC’s main aim is to attract a diverse group of bidders into the process, Mr. McArthur said. “If you’re already in the market and you’re looking for opportunities, then you can see the UK is a big opportunity on the horizon. We are keen to see what other interest there is, including from people who at the minute are not thinking of themselves but see the opportunity and think ‘why not?’” The commission has reportedly already been approached by companies that are interested in bidding, but there is no confirmation yet as to whether one of those companies is Northern and Shell, which was also said to be preparing a bid last year.