The UK’s National Audit Office (NAO) has opened a formal investigation into the fourth National Lottery licence, examining whether the Gambling Commission’s oversight of operator Allwyn is structured to maximise returns to good causes.
The probe will assess whether the Gambling Commission and DCMS designed and awarded the fourth lottery licence tender to support a successful delivery
and whether the transition has been managed effectively. The review lands as charitable contributions from ticket sales sit at their lowest level in close to a decade.
What happened
Allwyn won the fiercely contested competition for the fourth National Lottery licence in 2022, replacing long-standing operator Camelot.
Allwyn won the rights to operate the UK’s National Lottery in 2022, and its 10-year licence began in February 2024 after a protracted legal battle.
The NAO’s review will look at three distinct phases of that process.
The NAO has outlined three areas for review: whether the Gambling Commission established the right conditions for the Fourth Licence, how effectively it oversaw its implementation and how the Commission and DCMS could improve future lottery licensing.
The investigation follows criticism of Allwyn’s performance since taking over.
Allwyn has faced criticism due to falling sales and resulting hits to good causes cash, with the previous contract holder’s chair and former Tory sports minister Hugh Robertson claiming the Czech operator won the bid on unrealistic projections.
For its part,
Allwyn itself has highlighted the intense litigation it faced after the award as a reason for delayed implementation, as well as the heavy investment it has made into the UK since becoming the new operator.
The NAO has set out a clear timetable and named the officials responsible.
The investigation, to be conducted by NAO director Simon Bittlestone and study manager Callum Saunders, is due to be completed by spring 2027.
Industry observers note the review is aimed squarely at the regulators rather than the operator itself.
Despite media reports, the NAO’s investigation does not specifically target Allwyn.
Why it matters
The financial stakes behind the review are significant.
The review follows Allwyn’s failure to meet pledges made during the 2022 bidding process, including a promise to boost charity funding to £38bn over a decade, with last year’s contributions totalling £1.7bn and quarterly figures hitting a near-decade low.
Any formal finding that the licensing process or its oversight was flawed would carry reputational weight for both the Gambling Commission and DCMS, and could influence how the next lottery tender is structured.
For suppliers and operators watching the UK’s regulated gambling sector, the episode is a reminder that licence design and post-award oversight are now subject to the same level of public accountability as operator conduct. The Gambling Commission has already signalled it expects more from Allwyn on day-to-day standards. Acting UKGC chief executive Sarah Gardner recently told Allwyn that
“having that status brings immense value to The National Lottery and its work,” but it also brings “the need to live up to higher standards and the reality of greater scrutiny.”
The bigger picture
The NAO review adds to a year of mounting regulatory and fiscal pressure on the UK gambling sector, from Machine Games Duty proposals to wider debate over betting taxation. Operators and trade bodies have already been pushing back on parallel fiscal measures, including calls from leading bookmakers for a pause on General Betting Duty changes. A finding that the UK’s flagship state-backed gambling licence was poorly designed or overseen would sharpen scrutiny of how DCMS and the Gambling Commission handle licensing more broadly, at a moment when confidence in UK regulatory processes is already under strain.
Allwyn’s position is not without recent momentum. The Commission has acknowledged
the operational momentum Allwyn has built since completing the lottery’s largest-ever technology upgrade earlier this year
, even as it pressed the operator to lift standards further. How the NAO weighs that progress against the shortfall in good causes funding, due by spring 2027, will shape the terms on which the Commission designs future licensing competitions, including the balance it strikes between operator flexibility and public value guarantees.
Sources
- SBC News – National Lottery licence to be evaluated by UK watchdog
- next.io – National Lottery award faces review by public spending watchdog
- InterGame Online – UK National Lottery licence investigation opened
- iGaming Express – NAO Opens Allwyn Lottery Investigation
- EGR Intel – National Lottery facing probe by the National Audit Office
- Gambling News – UK National Audit Office to Investigate How UKGC Handled the Fourth National Lottery License
- News Minimalist – National Lottery faces watchdog probe over falling charity donations
- Global Gaming Insider – National Audit Office looking into Gambling Commission lottery oversight
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