UKGC used millions meant for charities

The ex-leader of the Conservative Party, Sir Iain Duncan Smith, has fired a broadside at the UK Gambling Commission for helping itself to ￡154.8m ($201m) in proceeds from National Lottery ticket sales earmarked for charities.

This is another example of the appalling way the lottery is run.”

Smith — who is also vice-chairman of the All-Party Parliamentary Group for Gambling-Related Harm (APPG) — said: “This is another example of the appalling way the lottery is run.”

Smith’s stinging rebuke came after The Mail on Sunday revealed the UKGC awarded itself ￡50m ($64.9) more than it had budgeted from the lottery funds. It has since asserted that it needed the extra cash to cover administrative costs.

“The proportion of funds going to good causes has plummeted,” the former Tory leader added.

The UKGC’s defense

Duncan Smith’s comments are likely to draw more unwanted attention to the gambling industry ahead of the UK government’s imminent publication of its regulatory review. However, the UKGC has made its case in response to the criticism.

As reported by the Mail, UKGC CEO Andrew Rhodes said the cost of licensing the lottery had increased by more than ￡50m ($64.9). He explained that the regulator had to take this from the charity funds, but that it represented only 0.7% of the ￡14.5bn+ ($18.8bn) saved for good causes.

Rhodes sent a letter to?the Chair of the?Commons Public Accounts Committee, Dame Meg Hillier, explaining where the money goes. In addition to regulating the lottery for the next decade, he said the UKGC also used the funds to pay for the recent bidding process of the fourth National Lottery license.

Regulator under scrutiny

The UK regulator’s handling of the National Lottery is under intense scrutiny at the moment.

a judicial review and a High Court procurement challenge

After losing out to Allwyn in the lottery license bidding process, Camelot is suing the UKGC. The suit incorporates both a judicial review and a High Court procurement challenge and, according to industry insiders, is likely to delay Allwyn signing the National Lottery license for around five months.

Added to this, Allwyn is owned by Czech billionaire Karel Komarek, who has ties to Russian state-owned energy organization Gazprom. However, the UKGC has affirmed it was “satisfied that no application [was] impacted by sanctions related to the conflict in Ukraine.” The firm has also confirmed it intends to cut ties with Gazprom.