Who Owns the National Lottery?
Last Updated: Tuesday 12th June 2018, 11:20 am
You may have heard of Camelot, the company that owns the license to operate the UK National Lottery, but is it true that it is owned by a pension fund from Canada?
In short, yes, although this is not a recent development. The Ontario Teachers’ Pension Plan acquired Camelot over eight years ago in news that would have escaped the attention of many people. Since then the lottery has been rebranded, seen several television shows come and go and introduced a number of supplementary draws.
So what happened when Camelot was sold and where does the money go now?
A Brief History of the National Lottery
The UK National Lottery was first set up under the government of John Major in 1993. A number of British companies, including Cadbury Schweppes and Royal Mail, plus the Florida-based software company GTECH Corporation, formed a consortium to acquire the rights to operate the lottery.
The consortium was named the Camelot Group, and it has held the license to operate the UK National Lottery since then.
Several of the major British companies that held stakes in Camelot have since ceased to operate. International Computers Limited (ICL) was incorporated into its parent brand, Fujitsu, in 2001, after 33 years in operation. Fujitsu retained ICL’s share of the Camelot Group. British electronics firm Racal, which held a 22.5% share in Camelot in 1994, was purchased by the French multinational Thales Group in 2000 (operating then as Thomson-CSF). Thales also acquired Racal’s share of Camelot.
Camelot’s National Lottery license was renewed for the third time in 2009, running for ten years with the option to extend it by a further five years. In 2010, the company was bought by the Ontario Teachers’ Pension Plan from Canada for a reported £389 million, beating a rival bid from private equity firm CVC Capital Partners.
Who Are Ontario Teachers’ Pension Plan?
Established in 1990, Ontario Teachers’ provide pensions for over 300,000 working and retired teachers in Canada. Based in Toronto, the company employs 1,100 people and is also one of the largest institutional investors in the country, with over $189.5 billion in net assets.
The company is also a major investor in overseas businesses and has offices located in London and Hong Kong. It holds shares in major British companies in addition to Camelot, including Birmingham International Airport and Scotia Gas Networks (SGN), a provider of natural and green gas to nearly six million homes across Scotland and the south of England.
Ontario Teachers' publicised the agreement to buy Camelot in March 2010, acquiring the shares from all five shareholders. At the time of the acquisition, Wayne Kozun, Ontario Teachers’ Senior Vice President of Public Equities, said: “We look forward to partnering with management to realize the full potential of the Camelot business over the remaining licence term and into the future.” Lee Sienna, Vice President of Long Term Equities, added: “Camelot is an excellent example of a first class business with long term potential and we look forward to making further investments to grow the company."
Does All the Money Go to Ontario Teachers’ As Profit?
The National Lottery is a UK state-owned franchise and as such it is closely regulated by the Gambling Commission, a governmental body responsible for supervising gaming law, licensing the National Lottery and protecting its players. For complete transparency, Camelot regularly provides updates on its financial performance, information that is made available to the public through its website.
Ninety-five percent of the revenue from lottery ticket sales is given back to winners and communities around the UK through the National Lottery’s Good Causes fund. Lottery funding is overseen by the government’s Department for Digital, Culture, Media and Sport, which has elected 12 bodies to distribute the money from the Good Causes fund. These include Arts Council England, the British Film Institute (BFI), the Big Lottery Fund and UK Sport. The awarding of funding is made independently of any government department, although there are guidelines in place that the funding bodies must adhere to.
Of the remaining 5% ticket revenue, 4% is split between government duty, operating costs and retailer commission, and 1% goes to Camelot as profit. The company recently announced that ticket sales for the year ending March 2018 were £6.95 billion, an increase of £26.4 million on the previous year. £1.65 billion of this went to Good Causes, £27.3 million more than last year, taking the total raised by the National Lottery Good Causes to £37 billion since 1994.
These numbers are subject to a final audit, after which a full financial report for the year ending March 2018 is expected to be published.
Lottery Players Contribute Directly to Good Causes
A percentage of the money from every single line of National Lottery numbers and every scratchcard goes towards helping Good Causes around the country, from supporting grassroots sports teams to funding larger non-profit organisations such as Yorkshire Sculpture Park. Over 525,000 projects have benefitted from lottery funding to date, and you can find out which projects near you have received some form of support on the National Lottery’s Good Causes page.