The Good Causes Claim, Examined: Does Lottery Money Add to Public Spending or Replace It?

"Good causes" is the moral licence for the lottery. In the UK the claim is specific, statutory and auditable, which makes it the best case in the world to examine.

There are two separate questions, and they get conflated constantly:

1. Does the money reach the causes? Yes, demonstrably, and the mechanism is set out in statute.
2. Is it additional to what government would have spent anyway? That is the additionality principle, and it is much weaker than it sounds.

Where the money goes, by law

Section 22(3) of the National Lottery etc. Act 1993 apportions the National Lottery Distribution Fund:

"(a) 20 per cent. shall be allocated for expenditure on or connected with the arts, (b) 20 per cent. shall be allocated for expenditure on or connected with sport, (c) 20 per cent. shall be allocated for expenditure on or connected with the national heritage, and (d) 40 per cent. shall be allocated for prescribed expenditure that is— (i) charitable, or (ii) connected with health, or (iii) connected with education, or (iv) connected with the environment."

(legislation.gov.uk, s.22)

Twelve bodies distribute it, with shares fixed as percentages of the whole Fund. From the audited National Lottery Distribution Fund Annual Report and Accounts 2025-26:

The three arts and film bodies plus BFI sum to 20.000%; the five sport bodies to 20.000%. The statute is followed to three decimal places.

The scale

From the same audited accounts:

"Up to and including the 2025-26 financial year, the 31st year of its operation, the National Lottery has generated £52 billion for good causes since its launch in 1994, with a further £2.6 billion raised in income from investment. It has benefited over 700,000 projects, large and small. The majority of National Lottery grants are under £10,000."

And for the year: "£1.8 billion being received by the NLDF in the year… On average, this equates to approximately £33 million raised every week."

DCMS states the rate plainly: "On average, 23p of every £1 spent on a National Lottery Ticket goes to National Lottery: Good Causes funding" (DCMS). That matches the Gambling Commission's audited pence-per-pound outturn of 23p for the year to 31 March 2025 — the full breakdown is in where each pound or dollar goes.

Over 31 years, £52bn averages £1.68bn a year. None of this is in dispute. It is a large, real, well-audited transfer.

Additionality: what the principle actually says

The promise made in 1992, in the White Paper that created the lottery (A National Lottery Raising Money For Good Causes, Cm 1861, para 41), was explicit:

"The Government does not intend that the money provided from the lottery should substitute for that provided in other ways: the proceeds will not be brought within the planning total, and the Government will not make any case by case reduction in conventional expenditure programmes to take account of awards from the lottery proceeds."

The statutory expression came fourteen years later. Section 12 of the National Lottery Act 2006 inserted section 34(2A) into the 1993 Act:

"The report shall set out the body's policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by— (a) a Government department, (b) the Scottish Ministers, (c) a Northern Ireland department, or (d) the National Assembly for Wales."

(legislation.gov.uk, National Lottery Act 2006 s.12)

Read it carefully. It requires each distributor to report on its policy. It does not prohibit the Government from reducing its own spending, it does not bind the Treasury, and it creates no remedy if displacement occurs. The distributors comply — The National Lottery Community Fund states in its 2025-26 accounts that "all awards made during 2025-26 were consistent with this principle" — but compliance is with a duty to describe, not a duty to be additional.

Four documented departures

1. The sixth good cause, 1998. The National Lottery Act 1998 created the New Opportunities Fund, which would "support specific initiatives, additional to core programmes funded through taxation, to support our priorities of health, education and the environment." The Commons Library records that this "was criticised as it was felt that this represented a break in the principle of additionality — that Lottery funds should not be subsumed into public expenditure" (Commons Library RP09-93).

2. The shares were cut, then restored. The Apportionment of Money in the National Lottery Distribution Fund Order 2010 set arts, sport and heritage at 18% each from April 2011, restoring 20% each from April 2012 (SI 2010/2863). Writing in 2008, John Major — the Prime Minister who created the lottery — put the earlier reduction bluntly: "In 1997, 20 per cent of Lottery proceeds went to each of the long-term good causes. In 1998, the Government cut that to 16.6 per cent."

3. The 2012 Olympics. This is the clearest case, and it is fully documented. The Lottery was tasked in 2005 with contributing up to £1.5bn to the Games. After the March 2007 budget overrun, "Parliament voted in support of diverting a further £675 million away from the good causes in January 2008."

The Commons Library's Table 7 (from HC Deb 22 March 2007) records £1,085m transferred from non-Olympic lottery proceeds, including £638.1m from the Big Lottery Fund, £161.2m from Sport England, £112.5m from Arts Council England and £99.9m from sportscotland. The total expected contribution was £2.2bn, "of which almost one-half will be transferred from other good causes."

4. And the £675m has not come back. This is the sharpest evidence available, and it is in an audited set of accounts published this year. Note 26 (Contingent assets) of The National Lottery Community Fund's 2025-26 report states:

"The National Lottery distributors are entitled to receive a share of receipts from the sale of land on Queen Elizabeth Olympic Park in return for their contribution of an additional £675 million… The most recent forecasts from the GLA state that proceeds are likely to be paid from 2030, but will be substantially lower than the £675 million contribution."

Eighteen years after the vote, the repayment is forecast for 2030 and expected to be substantially short. The same document certifies that every award complied with additionality.

The other leak: where the growth went

Additionality is about government substitution. There is a second, separate question about whether growth in sales reaches good causes at all.

The National Audit Office examined this in Investigation: National Lottery funding for good causes (HC 631, December 2017):

"Comparing 2009-10 and 2016-17, Lottery sales increased by 27% (£1.5 billion) to £6.9 billion. Comparing the same dates, returns for good causes increased by 2% (£31 million) to £1.5 billion and Camelot's profit attributable to its shareholders increased by 122% (£39 million) to £71 million."

Work the ratio yourself. In 2016-17, good causes took 1.5 ÷ 6.9 = 21.7% of sales. In 2009-10, sales were 6.9 − 1.5 = £5.4bn and good causes 1.5 − 0.031 = £1.469bn, or 27.2%. The good-causes share of every pound fell by five and a half percentage points while sales grew by a quarter.

The NAO explains the mechanism, and it is about product mix:

"As at February 2017, for each pound spent on the Lottery, the approximate returns for good causes ranged from 34p for draw-based games bought online to 10p for scratchcards, with some scratchcards returning as little as 5p."

Scratchcards pay out far more in prizes — "approximately 68% of gross sales for scratchcards, compared with 49% for draw-based games" — so they generate far less for causes per pound sold. Shifting the sales mix towards instants raises turnover and lowers the good-causes rate at the same time. That trade is examined game by game in return to player by game and the payout ratio league table.

(NAO, HC 631)

The honest position

• The money is real and it reaches the causes. £52bn over 31 years, distributed under a statutory formula, audited annually. Nobody has shown otherwise.
• Additionality is a reporting duty, not a guarantee. Section 34(2A) obliges distributors to describe their policy. Nothing prevents government substitution, and the 1998 sixth good cause, the 2011 apportionment cut and the Olympic diversion are the documented instances.
• The Olympic transfer is not a hypothetical. £1,085m moved from other causes, a further £675m voted in 2008, and an audited 2026 statement that the repayment will be "substantially lower" and no earlier than 2030.
• Sales growth does not automatically mean more for causes. Between 2009-10 and 2016-17, sales rose 27% and good causes rose 2%.

That is a more complicated claim than the one on the ticket, and it is the one the primary documents support. How the same question looks for lotteries that exist purely to fund charities is in charity lotteries vs state lotteries; who is funding all of it is in are lotteries a regressive tax?.