Camelot is lottery's big winner, with pounds 1m-a-week profits

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The Independent Online

Camelot, the National Lottery organiser, announced its interim results yesterday and hinted at plans to launch lotteries abroad amid growing concern over the profits it is making.

The results showed that a year after the lottery was launched Camelot is generating nearly pounds 1m a week in profit for itself from the weekly draw and scratchcard games. That is a return of one pence in every pound for shareholders, who will receive an interim dividend of pounds 9.5m in total, their first since their initial investment.

In the 24 weeks to 16 September, profits after tax were pounds 23.6m, from pounds 2.5bn worth of sales. For that period pounds 678.8m, 27 per cent of turnover, went to the good causes funds.

David Rigg, communications director of Camelot, defended the profits yesterday. "They show we've got off to an extremely good start, and raised enormous amounts of money for good causes," he said. "It may sound like a terrible lot of money, but investors put up an awful lot more to get the lottery started."

Company directors say the lottery has cost pounds 115m in capital expenditure. Running costs are pounds 82.7m.

The public spends on average each week pounds 65m on the big draw and pounds 25m on scratchcards. Camelot has a number of new initiatives planned, including a midweek draw. In other countries lotteries have reached burn-out, including those in Florida and California in the United States.

Tim Holley, Camelot's chief executive, says the National Lottery aims to be the most efficient in the world, in terms of the money it returns to the good causes boards - arts, heritage, charity, sports and the millennium.

It now comes second, behind New Jersey, in the US, where 41 per cent of turnover goes to the government or good causes.

Camelot defended its effectiveness, pointing out that the more money it generates, the smaller the percentage it is able to take in profit. If sales go above pounds 3.7bn, the amount it can cream off for cost and profit goes down to 1.65 per cent.

The Government has taken a further 13 per cent in lottery duty, tax and VAT, amounting to pounds 326.5m for the period of the interim results, and pounds 1bn in lottery tax for the game's first year.

Camelot said it would not rule out investing in new lotteries starting up abroad, despite British legislation.

"People from abroad obviously come and talk to us about what we might be able to offer, in terms of management and investment elsewhere," Mr Holley said. "It would be a question of going back to the Government and saying can we look at this legislation again?"

t Camelot should be required to open its books to the National Audit Office, the public finance watchdog, MPs are demanding. The Commons early- day motion, tabled by Liberal Democrats with Labour backbench support, comes amid concern that shareholders have enjoyed double profits - through contracts to supply computer terminals and printed entry slips, and sharing dividends.