Hundreds of post offices ditch National Lottery sales under new licence

The National Lottery’s new operator has revealed that around 900 post offices across the UK will no longer sell draw tickets and scratchcards under the new 10-year licence.

Allwyn, which took over the licence from Camelot on February 1, told the PA news agency that nearly a fifth (19%) of the 4,800-strong network of post offices that previously sold National Lottery products had not signed up to continue.

It comes after Post Office Limited decided last year to end its group contract with the National Lottery.

Post Office branch managers were given the choice on an individual basis to sign up to sell the products or not.

Post Office Limited used to take a processing fee from each National Lottery transaction, understood to be around 1%.

It said its decision to end the central contract was made in response to requests from postmasters, because it allowed them to receive all of the sales commission, in line with other lottery retailers.

Allwyn said more than 600 postmasters had chosen not to sign up, with reasons cited including religious beliefs or low lottery sales.

It claimed that up to 200 subpostmasters were unable to sign up as lottery retailers because of county court judgments, although these could be linked to the owner of the shop or store where the post office is based.

But the National Federation of Sub Postmasters (NFSP) said many post offices had chosen to stop selling lottery products because of the cost of buying scratchcards.

Post Office Limited used to cover the cost of buying scratchcards for each postmaster, but under individual retailer contracts, they must buy the stock themselves.

Lottery retailers are not able to sell tickets for draws without also selling scratchcards, under the retail agreement with Allwyn.

But if their scratchcard sales are not high enough, they could face losing thousands of pounds in unsold stock, according to the NFSP.

Calum Greenhow, chief executive of the NFSP, said retailers need to sell around £400 worth of scratchcards a week to make it worth their while.

It costs about £2,400 to fill a dispenser, but cards are refreshed every six weeks or so, meaning retailers could lose money on unsold stock if their sales are not high enough, he warned.

Mr Greenhow and his wife run a Post Office in Scotland and are among those who have decided not to continue selling under the new licence.

“We’d have ended up in a situation where we would’ve lost a significant amount of money,” he said.

“We would still be selling (lottery tickets) if it wasn’t for the scratchcards.”

Allwyn’s recently appointed UK boss Andria Vidler told PA that while some subpostmasters had dropped out, the “vast majority” had signed up to the new licence.

Post Office Limited added that it “spent a year supporting postmasters to transition to the new lottery provider, including regular communication, support visits by area managers and drop-in sessions”.

The figures come as the Post Office Horizon IT scandal continues, following the wrongful conviction of more than 700 subpostmasters.

Many of those affected are still fighting for compensation or to have their convictions overturned, although the Government has vowed to take action on this.

Allwyn said that 98.5% of its 23,000 independent retailers overall had signed up to sell lottery products under the fourth licence.

It had around 40,000 retail partners in total, with the remainder being the big supermarkets and retail chains, which it said were all signing up.

Ms Vidler said lottery products play an important role in helping attract people into shops.

“The high street is something that we really support,” she said.

“The investment in the lottery, both physical and digital – retailers see this as a real encouragement to get people out.”

Allwyn’s takeover of the National Lottery licence this month marked the first time the game had changed hands since its launch almost 30 years ago.

But the group told PA ahead of the switchover that plans for new draw-based games had been delayed until 2025 after the handover from Camelot was hampered by legal wrangling.

The company said that the delays to the new games would impact sales this year and hold back the amount of money it could give to good causes in the early part of its licence.

Its original promise to halve the price of a lottery ticket from £2 to £1 was also under review.