Stalling National Lottery ticket sales threaten to blow a multibillion-pound hole in the Exchequer, compounding the fiscal crisis facing Rachel Reeves.

Analysis of official figures by The Telegraph shows the National Lottery is on course to generate around £84bn of sales under new operator Allwyn by the end of its 10-year licence.

The projection, based on the current trajectory, is barely more than half the £152bn total implied by its successful bid for Britain’s richest public sector contract.

The shortfall means that the Treasury is in line for taxes of £10bn during Allwyn’s tenure, which is scheduled to end in 2034.

Additionally, the company’s ambitious bid suggested it would deliver £18.2bn to the public purse, suggesting a shortfall of £8bn.

Tax accounts for 12p in the pound on every National Lottery ticket and scratch card sold.

It is unclear if the Treasury or the Office for Budget Responsibility (OBR) are including Allwyn’s struggle to boost sales in their own forecasts.

Furthermore, the prospect of another significant hole in tax receipts is unlikely to be welcomed by Ms Reeves as she attempts to balance Britain’s books in her critical Budget next month.

Data published by HMRC show that lottery duty has been flat or declining since the peak in 2021, falling back to 2019 levels.

Economists are expecting another round of tax increases in the Chancellor’s Budget to address an anticipated £50bn hole in the public finances.

The National Institute of Economic and Social Research has warned that the Chancellor is on course to miss her borrowing targets as she faces an “impossible trilemma”.

She cannot “simultaneously meet her fiscal rules, fulfil spending commitments and uphold manifesto promises to avoid tax rises for working people. At least one of these will need to be dropped”, it warned.

Allwyn took over the National Lottery from Camelot last year with pledges of heavy investments in technology and marketing to revive sales.

In August, it began the first stage of a critical IT upgrade – which it claims will turbocharge growth.

However, it has faced claims from frustrated shopkeepers that machines have been left riddled with glitches as a result.

Lord Don Foster, chairman of Peers for Gambling Reform, said: “It’s deeply concerning that Allwyn are not delivering what they promised to do.

“I remain [concerned] about their ability to deliver what they promised, even with their new operating system.”

The potential fiscal fallout has emerged as the decision to award Allwyn its licence faces uncomfortable scrutiny at the High Court.

A trial over a £1.3bn claim bought by former pornographer Richard Desmond against the Gambling Commission over allegations the quango improperly conducted the bidding process will begin on Thursday.

Allwyn is ultimately owned by the Czech gas billionaire Karel Komárek. Its failure to meet its own targets is also a threat to Britain’s charities and sports, which depend on a roughly 25pc share of sales.

The operator originally pledged to more than double donations from £17.9bn under the last Camelot licence period to £38bn – equivalent to £3.8bn a year over the coming decade. However, the lottery generated just £1.8bn for good causes in its first year.

With the contribution to good causes growing at just 0.74pc a quarter or 3pc per annum, according to the company’s own figures, the lottery is on course to generate roughly £21bn over Allwyn’s licence. This amounts to a potential shortfall of £17bn.

The operator’s spending pledges have previously been attacked as “fanciful” in the House of Lords.

In a parliamentary debate in February, Viscount Chandos asked gambling minister Baroness Twycross whether the Gambling Commission had been “taken for a ride” by Allwyn during the bidding process.

Baroness Twycross insisted the Commission had “direct oversight” of Allwyn and had met executives “to receive additional assurance around delivery”.

A spokesman for Allwyn said: “Despite the challenges of the transition period, we are on track to double the contribution to good causes from £30m a week to £60m a week by the end of the 10-year licence in 2034.”

“Unlike previous licences, this one ties our income to a fixed percentage of the money returned to good causes, so we are completely aligned with the objective of increasing contributions to good causes,” the company added.

A Treasury spokesman said: “We aren’t going to give a running commentary on the OBR’s forecasts. The OBR have been commissioned for a full economic and fiscal forecast that will be published on Nov 26.”

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