In the year 2015...

... Anthea Turner, 55, is back and lotteries are funding everything from the monarchy to hospitals. Jim White takes an odyssey into our future

"Today is a historic occasion," said King William, clicking the mouse on his computer which dispatched a personal e-mail message to the worldwide Net. "The 14th of November 2015 will go down as the day the monarchy finally became publicly accountable."

The King was speaking from Labatt's Buckingham Palace, at the launch of Royalott ("Your chance to live like a King"), the hundredth lottery to be launched this year.

"I know there are plenty of other lotteries out there," said the King, "but we feel ours is a wee bit special. Not only is the prize money in the Government's higher band, but players will know that by purchasing a ticket they will be helping to stage all those smashing formal occasions which we used to know and love before the civil list was abolished."

Half of the money raised would go towards royal expenses, he added, so players would be directly supporting the work of the monarchy. "If they're paying for us, it's proof they want us," he said. "How much more democratic can you get?"

The King added that he was anticipating profits in the region of 20m ecus a year, which, in addition to corporate sponsorship and the cash- for-honours system, should meet the financial needs of the Royal Household well into the next decade. "At the very least," he said, "I'm hoping to cover the wife's mobile phone bill."

By coincidence, Royalott was launched on the 21st anniversary of the start of the first National Lottery. It is hard to imagine now what life was like before all public spending was financed by lottery, but back then (in the days when Dame Margaret of Blackpool North Pier was known simply as Mystic Meg) the idea was that the profits should top up, rather than fill, the public purse. "Transforming the nation," was the then Prime Minister, John Major's, launch cry.

Within a year, the lottery had become part of the national fabric: pounds 5bn poured into its coffers in the first 12 months from the sales of low-tech tickets and scratch cards, pounds 30m a week was distributed in grants, 150 millionaires were created. A survey commissioned six months after the lottery began revealed that planning how to spend your winnings had become the nation's favourite way of passing the time.

Certainly, lottery fixation became newspaper editors' favourite way of filling pages. Winners, losers, players all became the subject of media fascination. Post offices in housing estates were permanently staked out by researchers seeking scratch-card addicts. Tales of the sad and stupid buying huge numbers of tickets in the vain hope of winning their way out of the poverty trap constantly agitated the self-appointed guardians of the nation's morals ("Scheme to sell scratch cards in pubs provokes church fury" was the Independent's headline marking the first anniversary).

Even more mileage became available when the first hand-outs were made. The problem was, one person's good cause is another's shameful, elitist waste of time. Newspapers, particularly the Sun, fulminated against awards subsidising rich men's pleasure when medical charities, indeed the NHS itself, went short. Right-wing think-tanks began to put two and two together.

In fact, smaller awards to local arts and community schemes were more typical of the early days. Playing the lottery system became the single most important fund-raising skill of an arts organisation. Within three years, 35,000 new jobs were created in the arts, principally in lottery funding-related bureaucracy; in 1998, the University of Plymouth applied arts department offered a degree course in lottery-funding; and in 1999, the artist Derek Jenkins (aka Dog-End Degsy) won the Turner Prize in controversial circumstances with his subversive three-month performance piece "How to get a Lottery Grant". In the City, a Lottery Futures Exchange was established, trading in potential funding awards.

It was an arts-funding issue that finally altered the direction of the lottery, and with it brought down a government. The Blair administration of 1997-2001 had made small changes in lottery law in an attempt to make it more equitable: no tickets to be sold at post offices on benefit pick- up days; curbs on the so-called lottery sharks, agencies which patrolled the inner cities, loaning money at punitive interest to fund scratch-card purchase on the collateral of presumed future wins; transferring control of the operation to a non-profit-making operation established by Lord Branson of Air Miles. But they were unable to control the tide of anger that erupted when the Lottery Arts Fund paid pounds 30m to prevent Damien Hirst's "The Vortex of Humanity" (a monkey foetus preserved in aspic) being sold to an American gallery.

"That's what you call art, is it Tony?" stormed the Sun's leader. "It's enough to make right-minded folk physically sick."

After a vote of no confidence over the issuewas lost, Blair called a snap election. He lost by a landslide to the Conservatives under William Hague with his election slogan: "New Tories, new Britain, new Lottery".

Hague came to Number 10 on the promise of "full democratisation of the lottery. The people who should decide how the money is spent are those who play the game." The lottery was divided up according to beneficiaries. Initially, four separate lotteries (sport, arts, charities, medical research) were established, but when the arts operation went bankrupt after less than a month, it was decided that individual causes could control their own fund-raising. "After all," said Chris Evans, Heritage Secretary, "the British Museum was built on a lottery, why not the National Telecommunications Museum in Port Talbot?"

Moreover, such was the success of the medical research lottery that organisers ran out of charities to support. In 2003, legislation enabled excess funds to be diverted into NHS hospitals.

Emboldened by the policy's success, the Prime Minister made his historic announcement at the Tory party conference of 2005 (in the National Lottery Conference Centre, Brize Norton): income tax was to be abolished and all public spending would be financed from myriad specific lotteries.

"For too long government has decided how your money should be spent," said Mr Hague. "Now it's up to you. Each lottery will, in effect, be a mini-referendum on policy. Unpopular projects will need to offer bigger prizes to attract finance, thus introducing a welcome spirit of competition into government spending."

Thus the NHS lottery sells 40,000 units a day for a jackpot which has yet to top a million, while the MPs' salary lottery has recently advertised that it will create the first billionaire winner in an effort to attract punters.

And so, yesterday, the King found himself launching a lottery - to pay for essential royal services such as his sons' school fees, the Palace's permanent PR consultant and catalytic converters for the royal classic Nissan fleet. Harnessing the latest instant technology, it will be a game available via computer transponders at supermarket checkouts and more traditional outlets such as the Net.

One reporter at his press conference couldn't help wondering, however, why the King was bothering. If he was so short of readies, why didn't he just buy a ticket for the Free Nursery Education For All lottery like the rest of us?