Allwyn’s UK Lottery Deal to Face National Audit Office Investigation

The awarding of the UK’s National Lottery license to Allwyn is to be investigated by the National Audit Office (NAO), scrutinising whether the Gambling Commission oversaw the process effectively to deliver long-term value.

Allwyn took over the running of the National Lottery license in February 2024 as part of a 10-year agreement with the Commission, replacing Camelot, which had held the license since the National Lottery’s inception in 1994.

The audit is scheduled to take place in spring 2027. While it is not abnormal for the NAO to investigate what public funding has been spent on, it has particularly singled out whether the agreement provides long-term value.

Sales drop

In 2025, the first full year in which Allwyn held the license, ticket sales totalled £8.1 billion, up 3.5% from 2024. However, sales have dropped in 2026, with Allwyn’s UK revenue falling 16% year-on-year to €914 million (£775.9 million) in the second quarter.

In the last 12 months, the National Lottery has raised £1.7 billion for good causes, although the numbers have been dipping in recent times. In the first quarter of the 2026/27 financial year, the total generated for good causes was £377.2 million, down 22% year-on-year and the lowest the number had been in eight years. The total was also down by £69.5 million from the previous quarter.

When Allwyn took over the National Lottery license, it pledged to deliver £38 billion for good causes in total across the course of its 10-year license.

For this target to be hit, Allwyn would have to be generating £3.8 billion a year for good causes; significantly more than the £1.7 billion generated in the last 12 months. The target has since been amended to approximately £3.2 billion per year, or £60 million per week.

More spend than planned

Allwyn is reportedly on course to spend around £500 million in an attempt to overhaul the National Lottery’s IT systems, which is double what it had planned to spend on the project when taking over the running of the lottery.

In January, Allwyn announced what it calls a major upgrade to the National Lottery’s digital platforms, with the update allowing Allwyn to offer the largest ever range of National Lottery games.

The NAO’s statement confirming the probe reads:

“This study will examine whether the Gambling Commission has designed, implemented and overseen the fourth National Lottery licence effectively to maximise returns to good causes and deliver long-term public value.”

Court case

This is not the first time the agreement has faced scrutiny. Following the awarding of the license to Allwyn in 2024, the Commission was subject to a £1.3 billion legal challenge from The New Lottery Company Limited (TNLC) and Northern & Shell PLC, owned by British businessman Richard Desmond. Desmond’s company challenged the process the British regulator used to score Desmond’s bid before ultimately rejecting the application.

The company also challenged the lawfulness of alleged modifications made by the Commission to the contract for the fourth license. However, the case was dismissed by a High Court judge in April, and while Desmond had intended to appeal the ruling, the Court of Appeal blocked him from doing so in July.

All three grounds of appeal were dismissed by the Court of Appeal, which ruled TNLC should not be permitted to raise a new legal argument which has already been expressly ruled out in the High Court.