PO draws up bid to run Lottery

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THE Post Office is drawing up plans to bid for the National Lottery in a move which could generate a massive new stream of revenue and secure the future of thousands of rural post offices.

It is likely to receive a favourable reception from ministers who are working on their own proposals for giving the Post Office more commercial freedom, a matter of urgency as liberalisation develops in European postal markets. It would also solve the continuing problem of rural post offices, which make up roughly half the total branches and run at a loss.

The last government faced a fierce backlash, particularly from pensioners, when it was thought to be threatening rural post offices, which are regarded as an essential community feature.

A spokesman said the Post Office is "looking at the possibility" of bidding, although no final decision has been made. Camelot, the current operator, has the franchise until 2001.

The bid would make sense for an organisation which has already become the largest single seller of lottery tickets. More than half the 19,000 post offices sell Camelot scratchcards. Roughly the same number sell rival cards from Littlewoods, which might become a partner in a lottery bid.

The Post Office would not take away the right to sell tickets from other providers. It is aware that, because of its role as a retailer, there might be concern that it would squeeze out other sellers but believes that this could be overcome by regulation.