National Lottery operator Camelot reviews strategy after 8.8% drop in ticket sales

Camelot said total ticket sales fell to £6.9billion for 2016/17 from a record £7.5billion the previous year.

Total returns to good causes were lower than the previous year, mainly because of a "disappointing" performance across the National Lottery's range of draw-based games - especially on Lotto, where player confidence remained dented by three "very long and statistically unexpected" rollover series in quick succession at the beginning of last year.

EuroMillions also had a soft first six months in 2016/17 but its performance improved significantly over the second half.

Although the latest results reflected Camelot's fourth highest yearly sales, the company is facing increased competition from secondary lottery products such as Lottoland.

Camelot said it returned around 95p of every pound in revenue back to society, one of the highest percentages of any major lottery operator in the world.

The cost of playing EuroMillions increased by 50p to £2.50 a line and players had to choose from an extra number under changes introduced in September that decreased the odds of winning the jackpot but promised bigger prizes and double the number of UK millionaires.

Changes to the Lotto draw in 2015 saw the number of balls increase from 49 to 59 and the chance of winning the jackpot decrease from one in 14 million to one in 45 million.

The strategy review will focus on four key business areas: commercial plans to boost sales performance, investment in technology and systems, the current business structure, and long-term succession.

The company said an update will be given when Camelot announces its half-year sales.

Camelot chairman Jo Taylor said: "Achieving the fourth-highest ever sales, creating a record number of lottery millionaires and raising over £30 million every week for good causes, is no mean feat.

"However, sales in 2016/17 fell well short of where we'd like them to be - and that's largely down to a disappointing year for draw-based games and Lotto in particular.

"There's clearly work to be done to re-engage players and address the performance of our draw-based games - and this is one key area ... as part of the wider review.

"Given the current climate of economic uncertainty and increasing competition from the gambling sector, we expect 2017/18 to be equally, if not more, challenging for the National Lottery.

"It will therefore take time to turn things around and I anticipate a further sales decline this year.

"I am, however, confident that the review will enable us to put the business on the best possible footing to get back into growth - and so deliver even more for our players and the millions of people for whom National Lottery funding is so crucial over the remainder of this licence period."