Nigel Railton, the chief executive of National Lottery operator Camelot, has been on a winning ticket despite the pandemic.
He has just announced record sales of almost £8.4billion, along with a record sum of nearly £1.9billion given to good causes, the equivalent of £36million every week.
Of that, £1.2billion has been devoted to helping the country respond to Covid-19 in the largest contribution made to pandemic relief effort outside of government.
Turnaround: Nigel Railton took over as chief executive of National Lottery operator Camelot four years ago
‘We have helped up and down the country, across the nations,’ Railton (pictured) says.
Lottery duty paid to the Government topped £1billion for the first time.
It is quite a change in fortunes from four years ago, when Railton was installed as chief executive. At that point, he admits the National Lottery had come adrift.
‘We did a strategic review. It said we had lost relevance and when you lose relevance it is hard to win back.
‘We came up with a strategy and the net effect has been two years of record sales growth and the highest return to society in National Lottery history. I am really proud of it.’
Nearly £5billion was paid out last year in prizes to players, including 389 millionaires. This all comes at a good moment, since the race is well under way to win the next licence from the Gambling Commission to run the National Lottery, for ten years from August 2023.
Camelot has been in situ since the lottery began back in 1994. It is some time since there has been a credible threat to its dominance, after Sir Richard Branson’s Virgin Group lost a bruising fight for the licence two decades ago.
This time, there will be competition, likely to include media mogul Richard Desmond’s Northern & Shell, which runs the Health Lottery, and Czech businessman Karel Komarek, whose Sazka Group is a leading lottery operators on the Continent.
An Italian contender, Sisal, operates lotteries in Italy and Morocco.
Billionaire Desmond, 69, is a former owner of the Daily Express and Asian Babes. He was embroiled in a row over planning when housing secretary Robert Jenrick granted permission for a £1billion property development two weeks before the tycoon donated £12,000 to the Conservative party.
Komarek is an oil and gas billionaire whose Sazka Group is backed by Wall Street private equity firm Apollo. Both men would be seen as controversial choices if they win the right to run important national asset.
And all will have to prove that they have the capability to run a lottery in a world that has changed enormously from the mid-Nineties’ paper tickets and a weekly draw, with no smartphones or online play.
‘I can’t talk about the licence process but we would love to be selected,’ Railton says. ‘We just posted the best results in the lottery’s history and the highest-ever return to society. What has given us the super-charge is the connection to good causes.’
Now aged 54, Railton remains unusual among chief executives in that he comes from a modest background, which he shares with many of hopeful Britons who play the lottery and dream of millions.
He was born in Crewe, where he lived with his mum and dad in a council flat. Instead of the usual Oxbridge and Harvard Business School credentials, he studied accountancy at night school while living in a bedsit in Watford.
National Lottery funded: Jamie Bell stars in the hit 2000 movie Billy Elliot. The National Lottery gives £36m to good causes every week
‘All my family worked on the railway, no-one had been to college, university, basically aspirations were zero. I started off on the railways at 16, in the signal box making tea, but I had a big drive to do something with my life.
‘It was really tough, you have to make sacrifices but if you go through tough things, it makes you tough. I nearly gave up a couple of times. I woke up one morning in my bedsit in Watford and thought ‘I can’t do this.’ You have to search inside yourself to keep going.’
His pay of £1.3million in 2020 is relatively modest by top chief executive standards, but the father-of-three has certainly left the bedsit days behind.
Does he think his early life helps him connect with the people who play the lottery, and who benefit from the good causes? ‘Yes. I don’t know if it would be better if we had more CEOs with my sort of personal history but it certainly helps me understand the difference the lottery can make.’
He tells the story of meeting a man called Kenny on a trip to Glasgow. ‘We went to a tenement, it reminded me of the council flats where I grew up, the smell of the bins. Kenny had a grant to use a piece of wasteland to get people growing their own food and to change their diets.
‘I asked if he played the lottery and he said: ‘Of course I do, look at the difference it makes.’ It was like a light bulb going off in my head.’
Heart-warming anecdotes aside, the early days of lockdown were difficult for Camelot. People were staying away from the shops and it wasn’t clear whether tickets qualified as essential purchases.
Sales in stores were down just under 19 per cent at the half-year, but bounced back so that the decline in retail sales came to just under 11 per cent for the year. Since the year-end, they have recovered almost to pre-pandemic levels.
There was a record performance online, with 2.7m new registrations and digital sales of £3.5billion, an increase of 43 per cent.
Despite this impressive growth, he adds that ‘retailers, all 44,000 of them, will continue to be our backbone.’
‘People enjoy playing the lottery online and buying in shops – increasingly they will use both.’
For corner shops in particular, commission, which averages out at around £6,200 a store, can be a key source of income.
One big ambition is to sell lottery tickets in discount store Lidl. ‘We have been trying to get into Lidl for a while,’ he says.
The National Lottery is well-known for funding films, including Billy Elliot, The King’s Speech and Gosford Park, and for backing Olympic and Paralympic sports.
It also finances community initiatives, such as the Martin Gallier Project on the Wirral, which aims to reduce suicide. ‘It isn’t just the glamorous stuff,’ Railton says.
Camelot is owned by the Ontario Teachers’ Pension Plan, but given that the lottery is so deeply interwoven into national life, wouldn’t it be better if it were British?
‘Ontario Teachers are a fantastic owner, they take a long-term view,’ Railton says. I have been CEO since 2017 and in that time they have invested heavily, about £70million. Every investment I have asked them to support, they have done.’
That’s great, but isn’t money from Camelot still funding the retirement of Canadian teachers?
‘They do pay dividends to themselves but we are one of the most efficient large lotteries in the world and we pay all our taxes in the UK. Less than 1p in the pound is profit. Camelot is British, I am British,’ he says.
Changes to the rules from November so that more people win in a ‘roll-down’, when the jackpot has rolled over so many times the prize has to be paid out, have proved popular. Anyone who matches two numbers now receives £5 and a free ‘lucky dip’.
‘People are winning more often, so they play more and make the connection with good causes. That is why the brand positivity is high.’ Railton has little truck with anti-gambling campaigners who have Camelot in their sights.
‘Last year we had 37m people playing. We have seen an increase in frequency, but not in their average spend which is about £6.
‘This is a very healthy business with lots of people playing a little. We don’t see any significant gambling problems. It has made a difference everywhere in the UK and it is part of the levelling up agenda. My job is to raise as much money as possible to make that happen.’
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