Camelot’s UK chief executive Nigel Railton was grilled by MPs on the Commons Public Accounts Committee and by National Audit Office chief Sir Amyas Morse.

Mr Railton complained about competition from “society lotteries” such as the Health Lottery run by Daily Express owner Richard Desmond’s Northern & Shell company – but also promised action this year to revitalise his own company’s games.

The session followed a report by the NAO public spending watchdog that Camelot profits rose 122 per cent or £39million between 2009-10 and 2016-17, to £71million.

Over the same period, the amount it gave to good causes like the arts, sport, health, education, heritage and charities, rose just two per cent to £1.5billion – and fell by 15 per cent in the last financial year. 

It is expected to fall again this year. Labour committee member Chris Evans asked Mr Railton: “How do you justify that to someone who buys a ticket believing their money will go to a good cause?”

Mr Railton said £9million of the profit increase was due to the Government cutting Corporation Tax from 28 to 20 per cent.

Another £15milion came from ticket sales and £15million from savings made under terms set in 2012 when Camelot’s 10-year licence was extended by four years to end in 2023.

Mr Railton also stressed the company was investing £322million, including adding 8,000 new terminals to get extra customers. 

“That extra profit has allowed those investment decisions to be made,” he told the committee.

Mr Evans hit back: “You’re a monopoly. You have no direct competitors, you’re getting record profits.”

Mr Evans said the founding principle of the National Lottery which started in 1994 was that it would raise money for good causes.

He challenged Mr Railton: “Do you honestly believe that you are living up to that aim, yes or no?” 

Mr Railton said the Lottery had grown from 2003 to 2015 and the proportion for good causes was higher under the current licence.

“Disappointing” results for 2016-17 “shouldn’t distract”, he said.

He insisted the growth of other draws which he suggested had fewer restrictions had impacted, along with a growth in other forms of betting.

“We are increasingly competing for the leisure, entertainment industry pound in people’s pockets,” he said. 

“We cannot compete with the structural benefits of some of our competitors.

Former betting shop worker Mr Evans hit back: “I don’t buy it. I worked in the betting industry 20 years ago and you had betting on the Irish lottery, you had all those pressures. Why all of a sudden is it a problem for you?”

Earlier Sir Amyas repeatedly pressed Gambling Commission chief Sarah Harrison to say if she was “comfortable” with the pace of Camelot’s profit growth.

Noting that profits were one per cent of sales after tax compared with the 0.6 per cent expected, she conceded: “Looking most recently, it’s very difficult to see how one can be comfortable given that sales and returns to good causes have reduced in the way they have.”