From our Chief Executive

November 2009 marked the 15th anniversary of The National Lottery. I am immensely proud that in the 15 years since launch, the lottery has created over 2,400 millionaires and players have raised over £24 billion for the Good Causes. More than 330,000 projects across the UK, both large and small, have been awarded lottery grants – the equivalent of around 110 per postcode area.

There are now just over two years to go until the start of the London 2012 Olympic & Paralympic Games – the single largest project ever funded by The National Lottery. By contributing £2.2 billion to the public funding package The National Lottery will provide a lasting sporting and cultural legacy for the UK. At the time of writing, we remain on track, having now raised over £500 million of our target of £750 million through specially-designated lottery games.

As well as celebrating 15 years of lottery success, this first full financial year of our third Licence has enabled us to develop our strategy and start to implement our plans for the future. Our vision is to serve nations' dreams with integrity, and diversify, with a flourishing UK National Lottery at our heart. Over the past 12 months, I am delighted that we have taken our first steps towards turning our vision for the next 10 years into reality.

Sustainable growth is key to Camelot's approach to running The National Lottery. Our outstanding performance this year testifies to the importance we continue to place on responsible play and engaging with all our stakeholders – to the benefit of our players, communities and individuals all over the UK.

By putting consumer choice and convenience at the heart of everything we do, we have increased lottery sales by 14.4% over the last five years – in the face of a tough economic climate which has seen international lottery sales dip. Total sales this year were £5,451.8 million – up 5.9% on the previous year – which attests to the ongoing success of our strategy to maximise returns to the Good Causes in a socially responsible way.

We continue to maintain the appeal of The National Lottery and attract people to our brands by encouraging many players to spend small amounts. Although high numbers of people – around 70% of UK adults –regularly play National Lottery games, they spend a modest £3.152 on average per week. Moreover, GamCare's services report 2008 showed that fewer than 0.8% of calls to the Gamcare helpline related to draw-based games and only 2% related to Scratchcards.

This year, we increased sales across our draw-based and instant play categories as well as retail and direct channels of distribution. With over four million people registered to play The National Lottery through our website, we now operate one of the world's most successful online lotteries. At the same time, the fact that GamCare has once again accredited our interactive services, underlines our commitment to responsible play.

Our outstanding performance this year consolidated our position as one of the world's most successful lottery operators, and we have continued to share our knowledge and experience with lotteries in other countries. I take my role as co-chair of the World Lotteries Association (WLA) Corporate Social Responsibility Committee very seriously, and I use my position on the executive committees of both the WLA and European Lotteries to promote responsible gaming. I am also delighted that we achieved certification in the European Lotteries Responsible Gaming Standard, as well as the highest level of WLA Responsible Gaming accreditation.

Having pledged to further reduce operating costs from 5% of revenue to around 4% over the next 10 years, this year, we completed the review of our ongoing operational and employee requirements. This transformation into a leaner and more cost-efficient company has meant some difficult decisions, but we have had to focus on the long-term health of our business and our ability to generate the maximum possible returns to the Good Causes.

Throughout the year we continued to work hard to support employees and maintain motivation, while helping almost 200 people who we regrettably had to make redundant find new work. Despite theses challenges, it is a testament to our employees that our business enjoyed such a successful year. These achievements reflect the hard work and commitment of everybody in the organisation, whose dedication and professionalism throughout this year truly demonstrated Camelot's values and behaviours in action. We saw a slight dip in the number of employees taking part in our community-investment activities during the transformation process, and moving forward, we will refresh our approach to give participation a boost.

We also made good progress on our environmental management. We can reliably measure the footprint of our buildings and vehicles, and this year we made notable progress in cutting carbon emissions from our offices and sales fleet. We support the UK Government's leadership on climate change and are prepared for its new Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. Amongst other energy efficiency measures we plan to install automated gas and electricity metering in all our buildings by March 2011, so that we can more closely monitor and control our usage.

This year, Camelot has not only recorded the second-highest lottery sales since launch and the best returns to the Good Causes in a decade, but has also started to diversify into the wider UK and international markets.

Our regulator, the National Lottery Commission's (NLC) Invitation to Apply for the third lottery Licence encouraged bidders to look at potential revenue opportunities which could help maximise returns to the Good Causes, so we are now exploring other ways to diversify our business and increase returns. Accordingly, we have developed proposals for offering commercial services such as mobile top-ups, international calling cards, bill payment, and debit or credit card payments through the existing 28,500-strong lottery terminal network. Under the proposals being considered, the Good Causes would receive 80% of profits, after retailers' commission and Camelot's costs have been allocated – so would benefit from the additional income from this brand new revenue stream. Money for the Good Causes is something that is new to this sector and which no other service provider offers.

The NLC consultation into these proposals ended on 26 April 2010, and we had not seen the results at the time of writing. We remain confident that these services can play an important role in raising more money for the Good Causes, and eagerly await the NLC's decision.

This year, our new, independent sister company, Camelot Global Services Limited (CGSL), has secured a three-year contract to offer an independent international consultancy service to advise the California State Lottery to help it grow sales and maximise returns to the lottery's sole beneficiary, state education. Building on the success of this current role, CGSL is now exploring other opportunities, with lotteries and lottery operators around the world.

I am delighted that our potential new owner, Ontario Teachers' Pension Plan, shares our vision and determination to grow responsibly through diversification. I very much look forward to working with them to build on this year's tremendous achievements, and continue to maximise returns to the Good Causes for the remainder of this Licence period and beyond.

Dianne Thompson, CBE Chief Executive June 2010