Hundreds of post offices across the UK are set to stop selling National Lottery tickets and scratchcards.

The Post Office ended its group contract with the National Lottery last year, but branch managers were still allowed to sign up by choice.

Allwyn, which took over the National Lottery licence from Camelot on February 1, said nearly a fifth of the 4,800-strong network of post offices had not signed up to continue stocking tickets and scratchcards.

Some of the reasons given by postmasters for not signing up included religious beliefs and low lottery sales among others.

Cost of buying scratchcards too much for postmasters

The National Federation of Sub Postmasters (NFSP) has said many post offices have chosen to stop selling lottery products because of the cost of buying scratchcards.

Post Office Limited used to cover the cost of buying scratchcards for each postmaster, but under individual retailer contracts, they must buy the stock themselves.

Lottery retailers are not allowed to sell tickets for draws without also selling scratchcards, under licence rules set by the Gambling Commission.

However, if their scratchcard sales are not high enough, they could face losing thousands of pounds in unsold stock, according to the NFSP.

Calum Greenhow, chief executive of the NFSP, said retailers need to sell around £400 worth of scratchcards a week to make it worth their while.

It costs about £2,400 to fill a dispenser, but cards are refreshed every six weeks or so, meaning retailers could lose money on unsold stock if their sales are not high enough, he warned.

Post Office Limited said that it “spent a year supporting postmasters to transition to the new lottery provider, including regular communication, support visits by area managers and drop-in sessions”.

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Why did the Post Office end its National Lottery central contract?

Post Office Limited used to take a processing fee from each National Lottery transaction, understood to be around one per cent.

It said its decision to end the central contract was made in response to requests from postmasters, because it allowed them to receive all of the sales commission, in line with other lottery retailers.