The amount of money raised for good causes by the National Lottery in the year to March 31 2017 fell by £293.5m on the year before, according to the latest figures.
The lottery operator Camelot blamed a fall in sales but warned that it expected them to fall further this year and has launched a review in a bid to boost player interest.
Figures from the Gambling Commission show the total amount of money given to the National Lottery Distribution Fund in the 2016/17 financial year was £1.63bn, a fall of 15 per cent on the £1.93bn handed over in 2015/16.
In the final quarter of 2016/17 (January to March 2017), £428.4m was raised, £135.1m (24 per cent) lower than in the same period the year before. A note accompanying the statistics said there had been a record performance in that quarter of 2015/16 because of a Lotto rollover peak in January.
In a statement this week, Camelot said ticket sales in 2016/17 were 8.8 per cent lower than in the year before, having fallen from 2015/16’s record-breaking total of £7.6bn to £6.9bn.
The lottery operator said it had launched a strategic review to find out how to boost player interest.
Although 2016/17 was still the fourth-best sales performance since the National Lottery began in 1994, Camelot said the review would focus on four key areas: commercial plans to boost sales performance, investment in technology and systems, the existing business structure and long-term succession.
The review will be led by Nigel Railton, chief executive of Camelot Global, who took over Camelot’s UK operations when Andy Duncan, the UK chief executive, stepped down in April.
Jo Taylor, chair of Camelot, said: "Achieving the fourth-highest level of sales ever, creating a record number of lottery millionaires and raising more than £30m every week for good causes is no mean feat.
"However, sales in 2016/17 fell well short of where we’d like them to be, and that’s largely down to a disappointing year for draw-based games and Lotto in particular."
He said there was work to be done to re-engage players and address the performance of draw-based games, which would be a key focus for the review.
But he said: "Given the current climate of economic uncertainty and increasing competition from the gambling sector, we expect 2017/18 to be equally if not more challenging for the National Lottery.
"It will therefore take time to turn things around and I anticipate a further sales decline this year."
But he said he was confident the review would enable the company to put the business on the best possible footing to get back into growth.
In a statement, Camelot said it would publish an update on the review when it announced its half-year sales later in the year.
The price of a ticket for the main Lotto game was increased from £1 to £2 in October 2013.