UKGC Explains “Misused” £155M from Lottery Good Causes

UKGC Explains “Misused” £155M from Lottery Good Causes

The United Kingdom Gambling Commission may have “misused” as much as £155 million ($195 million) from National Lottery ticket proceedings that were supposed to go to good causes, but were instead used internally by the regulator to face budget deficits and other extenuating circumstances.

The news was revealed by The Mail on Sunday and the media estimates that the regulator used the proceeds to cover administration costs. At least £50 million ($65 million) were appropriated by the regulator the media claims instead of going to underfunded charities which should have been the recipients of such money.

“Appropriated Money” Has Explanation

However, UKGC chief executive Andrew Rhodes explained that a total of £154.8 million (201.4) was taken in order to guarantee regulatory efforts over the next decade. Part of the money was also used to complete the fourth National Lottery license award process which saw Allwyn Entertainment win and cause a flurry.

The bid is now being challenged by the runner-up and National Lottery operator incumbent, Camelot. Sisal, an Italian company, may also be joining in challenging the UKGC’s decision. While Rhodes made a fair argument as to why the money was necessary, not everyone was happy with the admission.

The All Party-Parliamentary Group for Gambling-Related Harm vice-chairman Sir Iain Duncan Smith called the “way the lottery is run” appalling and just the latest example of how the overall number of funds going to good causes had been falling.

According to Rhodes, who sent a letter to the Commons Public Accounts Committee chair Dame Meg Hillier, the initial budget for selecting the new lottery operator missed the original budget of £102.9 million ($133 million) by more than £50 million ($65 million).

Latest Revelations Come at a Sensitive Political Time

There have been several issues with the national regulator of late. They have been assailed by politicians and private companies while enacting some of the stiffest penalties on gambling operators in the United Kingdom.

For one, the recent National Lottery selection process saw the lottery award Allwyn, owned by Czech billionaire Karel Komarek, which caused criticism over Komarek’s alleged ties with Gazprom, a state-owned Russian energy giant.  

The UKGC responded at the time, though, that it was happy to announce that no bid was impacted by any sanctions imposed against Russia and the Kremlin’s regime responsible for the war in Ukraine.

The new information about the UKGC exceeding the budget allocated for the selection process will definitely play a part in the upcoming Gambling Act review which is seeking to overhaul the country’s gambling laws. It’s possible that the UKGC will also need to undergo significant changes.

A more extreme view is that the regulator may be scrapped altogether in favor of a new governing body instead.

Author: Ian Douglas