BT has joined the race to win the UK’s lucrative National Lottery contract after entering a partnership with Italian gaming group Sisal and children’s charity Barnardo’s.
The telecoms group said it was Sisal’s “preferred supplier” for communications technology and would advise the company on how to “widen the appeal of the National Lottery” and “enhance the online experience for players”.
The current UK lottery licence, operated by Canadian-owned Camelot, is due to expire in 2023, drawing fierce competition for one of the most profitable government-awarded private business contracts.
In the year to the end of 2020, Camelot, which has run the lottery through three licences since its inception in 1994, generated sales of £7.9bn and pre-tax profits of £95m.
Sisal, which is owned by the private equity group CVC Capital Partners and runs lotteries in Italy, Turkey and Morocco, is a late entrant to the competition after it delayed announcing plans in order to firm up its partnership with Barnardo’s.
Although it only announced the bid in April, chief executive Francesco Durante told the Financial Times the bid had been in the group’s three-year development plan since he took over in December 2019.
BT would manage Sisal’s operations and infrastructure in the UK, he added, while Barnardo’s will advise on maximising funds for good causes.
The UK gambling regulator is due to announce the winner of the 10-year contract in the autumn. Many in the industry believe the bidding war for the fourth licence could be the most competitive yet.
Other entrants include the Indian lottery operator Sugal & Damani, media mogul Richard Desmond’s Northern & Shell, Camelot and the Czech gambling group Sazka, which Sisal has beaten in two previous lottery tenders.
Richard Branson, billionaire founder of Virgin Group, dropped out of the process to focus on funding his companies during the pandemic.
Durante said he believed digital development would be the “key growth driver” for the National Lottery, as well as enlarging the jackpot, which for the main “Lotto game” has varied between about £2m and £20m this year.
But, he added, he would also like to see draws for the National Lottery back on TV as they were until 2016 and that BT would help innovate the retail experience.
“You have to be focused on a customer-centric approach to make sure the experience is outstanding no matter if they buy the ticket in a shop or online. The gap between that is getting thinner and thinner,” he said.
He added that Sisal’s digital business had cushioned it from financial losses during the pandemic. In 2020, its revenues fell 9 per cent, while overall gambling industry revenues in Italy fell 27 per cent.