Opinion

NEW PREDICTION: UK National Lottery set to fail


Today, UK National Lottery Operator Camelot have announced that they are doubling the price of a lottery ticket from £1 to £2 in order to ” “rejuvenate and re-energise” the Lotto game and increase the amount it contributes to good causes.”

This is a good causes fail, a brand fail, a PR fail and a marketing fail – and I predict that the National Lottery is going to fail completely within twenty four months.

At the moment, the National Lottery gives 28% of income to good causes and, apparently, this is set to continue under the new, doubled, ticket price and thus double the money to be given away.

So one could reasonably expect £3.32billion to be given to these local charities up and down the country.

Or can we?

I’d argue no.

As an occasional lottery player, I don’t mind splurging a quid on a ticket.  You have to be in it to win it, right?  Rarely I’ll have a flutter on the £2 EuroMillions.  Just because I can.

But at a doubled ticket price for the UK National Lottery, I’m not going to be bothering so much.

I bet that I’m not alone.

I predict that casual users – not the hardcore devotees who wait with bated breath for the wrong numbers to be drawn every week – will back off, thus reducing the income that Camelot (the operator) receives.

So as income reduces, the value of that 28% tumbles as well and less – not more – money goes to those ‘good causes’ than you’d expect.

This move damages the Lottery brand as well.

I’m going to leave aside the argument that Richard Branson originally wanted to run the National Lottery as non-profit making, but the contract was given to Camelot instead (who make profit, thus can be taxed… You get the drift)

I can’t see that Camelot are doubling their infrastructure prices.  How many more Lottery kiosks can they have in retail outlets up and down the land?

Are they going to be supplying gold plated tickets to the paying punters?

Of course not, that’ll be stupid.

Essentially, what Camelot are doing is doubling their income over their fixed (and probably unchanging) expenditure costs.

If we assume that this Guardian story from 2009 holds true today and that the percentages haven’t changed, the Government will make double the amount of money that it does currently in lottery tax and Camelot still stands to make double the money it does at the moment in profit – these are regardless of the financial value given to the aforementioned good causes.

OK so the bottom prize will go from £10 to £25,  but the other prizes for matching more balls will be slashed, apparently (presumably to keep the prize fund percentage the same).

This sounds like a great money-making machine for the Coalition and for Camelot…  But bad for the brand’s perception – especially if it keeps on yapping about raising ticket prices to increase the amount of money going to good causes.

This is a massive PR fail as well.

The Camelot Spokeswoman (notice – no real name; that’s a bad PR move for a start) said:

“Lotto has been in a state of steady decline at the moment and the overall contribution it makes to good causes is going down… We want to fix that and deliver significant extra money to good causes.” (SOURCE: ThirdSector.co.uk)

Yet, their Managing Director, Andy Duncan, said:

“Our players still love Lotto, but after 18 years they say they want more from it.” (SOURCE: Yahoo News)

So which is it, Camelot?  Either your players still love Lotto, or they are abandoning it, leaving you in a steady state of decline.

Make your mind up – then brief your (named) PR rep appropriately.

This kind of conflicting information doesn’t do anything for your PR credibility.

And finally, the marketing fail.

According to the spokeswoman, the Lotto is in decline.

That means that something needs to be done to perk it up.

Given the current recession, I can’t see how doubling the entry price is going to do it.

The chance that you’ll even get the lowest price isn’t going to change (it’s 56:1 if you were wondering).

So you, the player – the paying customer – will be asked to pay double for something that you don’t have twice as much chance of winning.

It doesn’t stack up, at least in my view.

There is no actual added value.  Unless you get three numbers (the upper tiers are reducing, so there’s no added value there, is there?).  Which is quite unlikely really.

What Camelot SHOULD have done is work out what added value they could bring to their games, and get a real understanding of why the Lotto is in decline.

Only then would they have been able to provide a more appropriate sticking plaster over the wound…

I give them 24 months before we see the model failing…  Maybe Richard Branson will be back in the game by then and run it as a genuine fundraiser for good causes, and not the corporate pocket…

Neil Hopkins is a Marketing and Branding Theorist at heart, and a Marketing Communications Manager by day. His blog – interacter – is the primary location he shares insight and information relating to marketing, branding and advertising strategy.
You can follow Neil on Twitter, circle him (like an escaped bull) on Google+ or track him down in any number of other ways.

Featured image originally found on this website:  http://lajmetmeterejaa.blogspot.co.uk/2013/01/cost-of-lottery-ticket-to-double-in.html

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7 thoughts on “NEW PREDICTION: UK National Lottery set to fail

  1. Pingback: Poor Man’s Tax To Go Up By 100 Per Cent. All In The Name Of Entertainment And Good Causes | Stirring Trouble Internationally « Stirring Trouble Internationally – Around the world

  2. I will have none of it. As A person who has had the same five lines every Saturday since the lottery began, they can now kiss my butt. I had an on line account which I tried to close on 17.1.2013, on hearing about the price hike.
    The cunning swine, have taken two further weeks sums for tickets I specifically told them by mail that I no longer wished to enter and as late as 24.1.2013 (a week later), took another £20 from my direct debit account despite five e mails telling them to close, and my having followed on line ‘Close Account’ Instruction.
    In Short.
    Thieving Scum. Co- conspirators of thieving M.P’s obviously.

    • With comment like this i can honestly say, ” If Camelot the Charlatans think that , “Its a brilliant idea! and then they are about to find out how brilliant an idea it is”

  3. The core problem for me is that the Camelot messaging ignores the fact that the National Lottery does not belong to them. It is operated by them, but it is run for the people of the UK as a way of providing funding for worthy causes. There is a logic to doubling the price (it cannot realistically be £1.37 a ticket), but the whole social cause is missing. It just looks like Camelot wanting to fund increased bonuses.

    TIP to marketers … consult, then explain. The opposite of what Camelot have done.

  4. Be careful what you wish for. Richard Branson is no altruist, he is simply a challenger businessman. It should also be remembered Virgin’s involvement in the original bidding process was shrouded in intrigue and descended into accusation and counter accusation. The mercurial Guy Simonis is a name I directly associate with the whole debacle (more so in 2001) ,and it is a little know fact that he had contact during the bidding with Richard Branson (the “people’s lottery”), even though he was part of the Camelot consortium.

    And why shouldn’t it have been heated? The prize for Virgin was enormous. The complete suspension of their advertising budget – forever! Their name on the BBC during prime time every week (15 min TVR cost anyone?) and on every ticket and poster throughout the land. The media value was almost beyond calculation – it could’ve have even saved Virgin Cola or one of their other brand extension roadcrashes through pure “generic” media weight. Bet you didn’t see that one coming?

    They like big events and there is nothing bigger on a weekly basis than the National Lottery. The rationale matches the one that David Beckham has used while donating his fee for 3 months to a childrens charity for playing for PSG. The value added to his reputation is immense: way beyond the fee he has sacrificed. At the top end the stakes are high.

    To unravel the National Lottery’s problems all we need to do is look at distribuition. For every pound spent on the National Lottery, it is split in the following ways:

    50p → Prize Fund
    28p → Good Causes
    12p → Government
    5p → Retailers as Commission
    5p → Camelot 4.5p → Camelot for Operating Costs
    0.5p → Camelot for Profit

    The initial shareholders in Camelot included companies like Cadbury’s, Racal, De La Rue and ICL. If someone was to look at their connection to the Conservative Party at all levels one mighty be surprised. The whole project was carved up between party and treasury.

    However the biggest carve up was undertaken by the treasury. The 12p in the £1 take by the treasury is immoral. When the close defeat of Ivan Lawerence’s private members bill was engineered by the Treasury John Major -influenced by Norma who was the one who identified how politically powerful it could be – had already decided it was going to be in the manifesto.

    If the bill had passed as a Private Members one the opportunity for a structure that didn’t involve tax was possible, in a piece of Government legislation there was no such opportunity. The Treasury wanted Commercial involvement as that was the way to ensure several tax catches and this was non-negotiable. It was calculated that for a little as £30 million of Government money the Lottery could have been set up, and many many times that was paid back to the five companies of Camelot over the period of the first licence.

    The lottery was the inspiration of Denis Vaughan. an Australian who formed the Lottery Promotion Company. He spent a £1 million of his own money to help change legislation, and campaign for the Lottery to be non taxed. His vision included a fund to protect school playing field’s, and endow orchestra’s.

    Whilst Eddie Kulukundis, a member of the Lottery Promotion Company board received an OBE, Denis Vaughan remains unrewarded, and unknown as the agent of legislational change. He meet with all the Government Ministers oif the day and was in part funded by the Royal Mail and G-Tech.

    Margaret Thatcher’s vehement objection to the Lottery, and Ian Paisley’s view it was a “tax on the poor”, are now just virtually forgotten. What is not forgotten is John Major’s miraculous election win.

    The story continues with the main Canadian Teachers Union buying Camelot. They’re a completely different skill set. It is arguable that the force for increased ticket prices could be partially directed by the Treasury. 12% is a massive take.

    The Lottery’s creation, has enough twists and turns and political intrigue to deserve a book. However what is certain is that in the present the doubling of the fee is part of someone’s revenue generating deas and it is not necessarily designed to benefit the Good Causes.

  5. LOTTERYS ARE A TOTAL MUGS GAME 14 MILLION TO ONE CHANCE OF WINNING
    THE SAME CHANCE AS BEING IN A PLANE CRASH AND BEING STRUCK BY LIGHTNING IN A WEEK A LOT OF PEOPLE ARE REARLY STUPID IN HAS TOOK ALL THESE YEARS FOR THEM TO FIGURE IT OUT NEVER PLAYED IT NEVER WILL
    PAUL BAKER

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