The National Lottery will force the closure of 2,000 betting shops with the loss of more than 6,500 jobs unless the Government intervenes to assist bookmakers who are struggling to compete, according to an independent report to be published later this week.
Britain's racing industry could also lose almost 15 per cent of the funding it receives from off-course betting as punters abandon the horses for lottery tickets and scratch cards.
The report has been prepared by the Henley Centre for the Bookmakers' Committee.
It will cause concern throughout the country's 9,300 betting shops, which exist on narrow profit margins and require substantial and continuous turnover to survive. In 1994, the centre estimates turnover to have been pounds 6bn, of which about pounds 50m returned to racing via the Horse-race Betting Levy.
While some shops will attract big hitters who stake in three or four figures, most rely on small-scale punters risking pounds 5 or less, who appear to have been lured away by lottery tickets and, in particular, scratch cards.
The report estimates that betting turnover would have grown by 6.2 per cent in 1995 had it not been for the introduction of the lottery. Instead, it has declined by 1.5 per cent at a time when an expanded evening racing programme and the introduction of Sunday racing have significantly increased bookmakers' costs. As a result, the profitability of the average betting shop is expected to drop by more than 30 per cent, forcing more than a quarter to close. The racing industry, meanwhile, would lose a crippling pounds 6m in levy revenue.
The report will now form part of a submission to the Treasury urging a reduction in betting tax in November's Budget. If the Chancellor refuses and closures begin, the 40,000 workers in betting shops will face the prospect that next week, it could be them.
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