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Lotteries - UK - April 2010

This report looks at the changes taking place in the Lottery market, including the growth of interactive platforms as sales channels and the developments within the draw-based and scratchcard segments of the market.

  • The lottery market has grown by 3.7% in 2008/09 and by and estimated 2.7% in 2009/10 to reach a total value of around £5.5 billion. This represents an increase in its share of total gambling expenditure because of its low cost and ease of play.
  • The launch of the EuroMillions game in February 2004 gave the National Lottery a major boost in sales between 2004 and 2006 as the game became established. Once it became firmly entrenched, the trend in lottery sales was essentially flat in real terms.
  • The National Lottery accounts for 97% of the total money staked on lotteries in the UK. The National Lottery’s share has fallen very slightly in recent years but has remained around the 97% level.
  • The major drivers of ticket sales in the past few years have been the increasingly popular online and interactive games, especially online scratchcards. Together, these games now account for around a quarter of National Lottery sales.
  • While 49% of adults play lotteries, only 30% are loyal players. Most non-players tend to be of middle to higher income and are aged under 35. A third of adults have never played.
  • The Lotto remains by far the most popular Lottery game played and is especially popular among frequent players. The EuroMillions and scratchcards are both successful in attracting younger and more occasional players.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Qualitative Research
            • Abbreviations
            • Future Opportunities

              • Championing the Cause
                • A local Cause for local people
                  • Draw dilemma
                    • The tyranny of small decisions
                    • Market in Brief

                      • Market reaches £5.5 billion
                        • Figure 1: UK lottery sales (year ending 31 March), 2004/05-2009/10
                        • Figure 2: The Annual percentage change in lottery ticket sales (year ending 31 March), 2003/04-2009/10
                      • The National Lottery: the only game in town?
                        • Scratchcards drive sales…
                          • Figure 3: Percentage of National Lottery ticket sales from scratchcards and instant-win games, 2004/05-2009/10
                        • …along with the EuroMillions draw
                          • EuroMillions and scratchcards pull in young players
                            • Figure 4: Game preferences of Lottery players during last 12 months, December 2009
                          • Online of growing importance
                            • New Camelot owners?
                              • Half of adults play
                                • Figure 5: Proportion of adults playing or not playing lotteries, December 2009
                              • Impulse and fear impact on players
                                • Complexity and lack of winning deter play
                                • Internal Market Environment

                                  • Key points
                                    • Lotteries in the UK
                                      • The UK National Lottery model
                                        • New section 5 license
                                          • Figure 6: The minimum number of outlets with draw facilities, by year of Lottery licence, 2009 onwards
                                        • Camelot seeks to broaden its operations
                                          • A World Lottery
                                            • Possible change of Camelot ownership
                                              • Lottery scams...
                                                • …and invalid tickets
                                                  • Problem gambling
                                                    • Figure 7: Prevalence of problem gamblers (% of those gambling on an activity in the past year), 2007
                                                  • Children not playing the game
                                                  • Broader Market Environment

                                                    • Key points
                                                      • A squeeze on consumer spending…
                                                        • Figure 8: GDP quarterly % change, 2004-09
                                                      • …but how will the recession and recovery impact on the Lottery?
                                                        • Figure 9: The share of total consumer expenditure* taken by games of chance, at constant 2005 prices seasonally adjusted, Q3 1980-Q3 2009
                                                      • V-shaped or U shaped?
                                                        • An ageing population generally positive for the Lottery...
                                                          • Figure 10: Trends in the age structure of the UK population, 2009 and 2015
                                                        • …but the changing socio-economic profile is not so positive
                                                          • Figure 11: Forecast adult population trends, by socio-economic group, 2004-14
                                                        • Online distribution grows in importance
                                                          • Figure 12: British internet penetration at home/work/place of study or elsewhere, by gender, age and socio-economic group, 2003-09
                                                        • Mobile play, something for the future
                                                        • Competitive Context

                                                          • Key points
                                                            • Gambling sees its share of the leisure pound fall
                                                              • Figure 13: Consumer expenditure on leisure goods and activities, at current prices, 2004-09
                                                            • Lotteries gaining share of gambling stake…
                                                              • Figure 14: Breakdown of UK gambling stakes, by sector (year endng March), 2005/06-2008/09
                                                            • …and now accounts for almost a third of net expenditure
                                                              • Figure 15: Net expenditure on National Lottery vs other forms of gambling, 2001/02-08/09
                                                          • Strengths and Weaknesses in the Market

                                                              • Strengths
                                                                • Weaknesses
                                                                • Who’s Innovating?

                                                                  • Key points
                                                                    • Camelot’s first 3D game
                                                                      • Camelot’s Millionaire Raffle
                                                                        • New Wi-Fi terminals
                                                                          • snapNwinTM
                                                                            • Lotteries via mobile phone banking
                                                                            • Market Size and Forecast

                                                                              • Key points
                                                                                • Lottery sales up despite the recession
                                                                                  • Figure 16: UK lottery* sales (year ending 31 March), 2004/05-2014/15
                                                                                  • Figure 17: UK lottery sales trends (year ending 31 March), 2002/03-2009/10
                                                                              • Segment Performance

                                                                                • Key points
                                                                                  • The National Lottery dominates
                                                                                    • Figure 18: UK lottery sales, by type of Lottery (year ending 31 March), 2004/05-2009/10
                                                                                  • Scratchcards of growing importance to Camelot
                                                                                    • Figure 19: National Lottery sales, by sector, 2004/05-2009/10
                                                                                  • Lotto still numero uno…
                                                                                    • Figure 20: National Lottery sales, by game (year ending 31 March), 2004/05-2009/10
                                                                                  • …but EuroMillions growing fast
                                                                                      • Figure 21: Sales of draw-based National Lottery games, by game (year ending 31 March), 2004/05-2009/10
                                                                                  • Distribution of Sales

                                                                                    • Key points
                                                                                      • Online of growing importance
                                                                                        • Figure 22: National Lottery sales, by distribution channel, 2004/05-2009/10
                                                                                      • Retail channel also benefits from new technology
                                                                                        • Figure 23: Retail National Lottery sales, by type of purchase (year ending 31 March), 2005/06-2009/10
                                                                                    • Brand Communication and Promotion

                                                                                      • Key points
                                                                                        • Camelot ad expenditure
                                                                                          • Figure 24: Trends in Camelot Group plc main media advertising expenditure, by channel, 2005/06-2008/09
                                                                                        • TV advertising dominates
                                                                                          • TV advertising of new scratchcard games
                                                                                            • Camelot improves its point of sale
                                                                                            • Companies and Products

                                                                                              • Key points
                                                                                                • The main players
                                                                                                  • Camelot Group Plc
                                                                                                    • Two themed strategy
                                                                                                      • Sales of £5 billion
                                                                                                        • Figure 25: Camelot’s financial performance, year ending, 31 March 2004/05-2008/09
                                                                                                      • The half year to 26 September 2009
                                                                                                        • The Weather Lottery Plc
                                                                                                          • Derivative operators
                                                                                                            • Lottery service and product supplies
                                                                                                            • Who Plays Lotteries?

                                                                                                              • Key points
                                                                                                                • Half of adults play lotteries
                                                                                                                  • Figure 26: Frequency of playing lotteries, December 2009
                                                                                                                • The poor pay and the rich play?
                                                                                                                  • Figure 27: Frequency of playing lotteries, by age, lifestage and socio-economic group, December 2009
                                                                                                              • Why Do People Play?

                                                                                                                • Key points
                                                                                                                  • Players don’t gamble, they have fun
                                                                                                                    • It may be gambling Jim, but not as we know it
                                                                                                                      • Frequently players can’t stop in case they miss out on the big prize
                                                                                                                        • Attitudes towards the National Lottery
                                                                                                                          • Figure 28: Lottery attitudes, December 2009
                                                                                                                        • Player typologies
                                                                                                                          • Figure 29: Player typologies, December 2009
                                                                                                                          • Figure 30: Player typologies, by frequency of play, December 2009
                                                                                                                        • Ease of play a big plus for frequent players
                                                                                                                          • Figure 31: Lottery attitudes: Simples! vs all players, December 2009
                                                                                                                          • Figure 32: Selected lottery attitudes, by frequency of play, December 2009
                                                                                                                        • Occasional players act on impulse…
                                                                                                                          • Figure 33: Lottery attitudes: Impulsives vs all players, December 2009
                                                                                                                        • …and greed
                                                                                                                          • Can you tell Irrationals by their behaviour?
                                                                                                                            • Figure 34: Lottery attitudes: Irrationals vs all players, December 2009
                                                                                                                          • Savers hit hard
                                                                                                                            • Figure 35: Lottery attitudes: Savers vs all players, December 2009
                                                                                                                        • Targeting Non-players

                                                                                                                          • Key points
                                                                                                                            • Who are the non-players?
                                                                                                                              • Figure 36: Frequency of playing lotteries. December 2009
                                                                                                                            • Young and affluent not engaged
                                                                                                                              • Figure 37: Adults who have never played lotteries and are unlikely to, by age, lifestage and socio-economic group, December 2009
                                                                                                                            • Non-player typologies
                                                                                                                              • Figure 38: Non-player typologies, December 2009
                                                                                                                            • Some non-players are similar to players
                                                                                                                              • Fears of addiction need to be addressed
                                                                                                                                • Long odds also lead to player fatigue
                                                                                                                                  • Figure 39: Adults who used to play but haven’t played in the last 12 months, by age, lifestage and socio-economic group, December 2009
                                                                                                                                  • Figure 40: The level of Lottery engagement, by non-player type, December 2009
                                                                                                                                • Game proliferation also an issue
                                                                                                                                  • Camelot must appeal to the young
                                                                                                                                    • Figure 41: Adults who have never played lotteries but might do in the future, by age, lifestage and socio-economic group, December 2009
                                                                                                                                • What Games Do People Play?

                                                                                                                                  • Key points
                                                                                                                                    • Lotto still in pole position
                                                                                                                                      • Figure 42: Lottery-related activities personally participated in during last 12 months, December 2009
                                                                                                                                    • Game-playing typologies
                                                                                                                                      • Figure 43: Game preferences of Lottery players during last 12 months, December 2009
                                                                                                                                    • Keep your eyes on the prize
                                                                                                                                      • Figure 44: Game player clusters, by attitudes towards prizes, December 2009
                                                                                                                                    • The EuroMillions pulls in the occasional player…
                                                                                                                                      • Figure 45: Game player clusters, by frequency of play, December 2009
                                                                                                                                    • …and the younger players
                                                                                                                                      • Figure 46: Scratchcard players and Europhiles, by age and lifestage, December 2009
                                                                                                                                    • Scratchcards and online appeal to younger and occasional players
                                                                                                                                      • Figure 47: Lottery attitudes, by game player clusters, December 2009
                                                                                                                                    • Frequent prompts needed
                                                                                                                                      • Figure 48: Importance of prompts and media coverage, by game player clusters, December 2009
                                                                                                                                    • The scratchcard as a present
                                                                                                                                      • The recession hits the Lotto
                                                                                                                                        • Figure 49: Impact of the recession on game play, by game player clusters, December 2009
                                                                                                                                      • Savers prefer the weekend main draw
                                                                                                                                        • Figure 50: Games played, by player typologies, December 2009
                                                                                                                                    • Appendix – Who Plays Lotteries?

                                                                                                                                        • Figure 51: Frequency of playing lotteries, by demographics. December 2009
                                                                                                                                    • Appendix – Why Do People Play?

                                                                                                                                        • Figure 52: Most popular Lottery attitudes, by demographics, December 2009
                                                                                                                                        • Figure 53: Next most popular Lottery attitudes, by demographics, December 2009
                                                                                                                                        • Figure 54: Lottery attitudes, by player typologies, December 2009
                                                                                                                                        • Figure 55: Player typologies, by demographics. December 2009
                                                                                                                                    • Appendix – Targeting Non-players

                                                                                                                                        • Figure 56: Non-players, by demographics. December 2009
                                                                                                                                        • Figure 57: Attitudes towards the Lottery, by non-player typologies, December 2009
                                                                                                                                        • Figure 58: Non-player typologies, by demographics, December 2009
                                                                                                                                    • Appendix – What Games Do People Play?

                                                                                                                                        • Figure 59: Lottery-related activities personally participated in during last 12 months, by demographics, December 2009
                                                                                                                                        • Figure 60: Lottery-related activities personally participated in during last 12 months, by Lottery-related activities personally participated in during last 12 months, December 2009
                                                                                                                                        • Figure 61: Lottery-related activities personally participated in during last 12 months, by frequency of playing lotteries, December 2009
                                                                                                                                        • Figure 62: Games played, by game player clusters, December 2009
                                                                                                                                        • Figure 63: Game player clusters, by demographics, December 2009

                                                                                                                                    Companies Covered

                                                                                                                                    • Asda Group Ltd
                                                                                                                                    • Barcrest Group
                                                                                                                                    • Bet365 Limited
                                                                                                                                    • Betfred.com
                                                                                                                                    • Cadbury Trebor Bassett
                                                                                                                                    • Camelot Group plc
                                                                                                                                    • Co-operative Group
                                                                                                                                    • Coral Eurobet plc
                                                                                                                                    • Department for Culture Media and Sport
                                                                                                                                    • Facebook, Inc.
                                                                                                                                    • First National Bank Plc (UK)
                                                                                                                                    • Freeview
                                                                                                                                    • Fujitsu Limited
                                                                                                                                    • Gambling Commission
                                                                                                                                    • Government Actuary's Department (GAD)
                                                                                                                                    • Grupo Santander Central Hispano S.A.
                                                                                                                                    • IGT-UK Ltd
                                                                                                                                    • Institute of Electrical & Electronics Engineers Inc.
                                                                                                                                    • J. Sainsbury
                                                                                                                                    • Ladbrokes Ltd
                                                                                                                                    • Market & Opinion Research International (MORI)
                                                                                                                                    • Marks & Spencer
                                                                                                                                    • Mecca Leisure
                                                                                                                                    • National Lottery Commission
                                                                                                                                    • Office of Fair Trading
                                                                                                                                    • Orange plc (UK)
                                                                                                                                    • Paddy Power Plc
                                                                                                                                    • Post Office Counters Ltd
                                                                                                                                    • Sagem SA
                                                                                                                                    • Somerfield
                                                                                                                                    • Sportingbet PLC
                                                                                                                                    • Starbucks Coffee Company UK Ltd
                                                                                                                                    • Tesco Plc
                                                                                                                                    • The Weather Lottery Plc
                                                                                                                                    • Vernons
                                                                                                                                    • Virgin Group Ltd.
                                                                                                                                    • Waitrose
                                                                                                                                    • WH Smith PLC
                                                                                                                                    • Wi-Fi Alliance
                                                                                                                                    • William Hill
                                                                                                                                    • Wm Morrison Supermarkets
                                                                                                                                    • Xfm

                                                                                                                                    Lotteries - UK - April 2010

                                                                                                                                    £1,995.00 (Excl.Tax)