The National Lottery, owned by a Camelot, is the provider of UK scratchcards and other lottery games such as Lotto, Thunderball and Euromillions.
After paying out expenses such as winning prizes, funds for good causes and tax, Camelot retains a certain amount of revenue to provide funding for operating costs and as profit.
But just how is the revenue divided between these factors?
Draw Based Games vs Scratchcards
Draw based refers to games such as lotto, euromillions and thunderball. At a set time each week, a draw is made and the prizes are paid out based on this.
Scratchcards are an instant win game, and the prize is fixed before you purchase it. You scratch off the silver foil to reveal the fixed prize.
This is important as the way money is shared is based on this.
We will discuss where money spent on scratchcards purchased in store and through their online version - GameStore.
From a report published on 13th December 2017,
(total value equals 99p due to rounding)
Very simply, prizes accounts for the total amount of money paid out every time you win on a scratchcard. This means that for every £3 spent on scratchcards, roughly £2 gets paid out as wins.
Income For Good Causes
As part of the agreed license mentioned above, The National Lottery must re-invest profits into good causes. The money goes into funding projects including helping small one-off projects as well as national projects such as assisting the Olympic and Paralympic athletes.
To incentivise small and large retailers to sell scratchcards to the public, The National Lottery pays out a commission. The more scratchcards retailers sell, the more they make.
For each £1 spent on scratchcards, retailers make about 5p.
The final split of revenue is retained by the owner of The National Lottery - Camelot.
Of every £1 spent, approximately 4p is kept by Camelot. Just 1p of this figure is kept as profit, whilst the remaining 3p is spent on operating costs such as staff salaries.
So there you go. That's how scratchcard sales are divided.
Interestingly, scratchcards payout better than draw games such as lotto and thunderball, so maybe stick to buying the scratchcards?