UK National Audit Office to examine how UKGC and DCMS handled fourth National Lottery licence

The UK's National Audit Office (NAO) is to investigate the way the fourth National Lottery licence has been handled. The review comes amid scrutiny of Allwyn, the operator that took over from Camelot, and of lottery sales performance.

Allwyn won the fourth licence and replaced Camelot as custodian of The National Lottery. The award process was controversial, with some questioning whether the company could match Camelot's results. Allwyn has said it would modernise the lottery, and it has introduced new products and systems, including the launch of the Powerball game in the UK. Critics have previously questioned the pace of these upgrades and whether the company is doing enough.

The NAO has made clear that Allwyn is not the focus of its study. Instead, it will examine the UK Gambling Commission (UKGC) and the Department for Culture, Media and Sport (DCMS), and how the two bodies managed the new licence and the transition from Camelot to Allwyn.

In its announcement, the NAO noted that The National Lottery raises billions of pounds for good causes across the UK, including sport, arts, heritage and community projects. The UKGC regulates the lottery and is expected to ensure it is run in a way that maximises returns to those causes.

For the fourth licence, the UKGC introduced a new operating model that gives the lottery's custodian more flexibility. It was also the first time since the lottery was established in 1994 that the licence went to a company other than Camelot.

The NAO will assess whether the licence has been designed, implemented and overseen effectively. Specifically, it will look at whether the UKGC and DCMS prioritised successful delivery of the lottery when designing and awarding the licence, and whether they properly oversaw the handover from Camelot to Allwyn. It will also consider whether they have identified and applied lessons from the fourth licence to support delivery through to 2034 and to inform future licensing arrangements.

The NAO expects to complete its investigation by the end of next spring.