Small payout to charities as lottery cashes in

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Camelot will this week launch a range of lottery merchandise which is expected to generate millions of pounds, yet charities are unlikely to see more than 5 per cent of the profits.

The company will announce that it is to sell licenses to manufacturers to produce a line of National Lottery-branded goods, including fridge magnets, "Lucky Lockets" and computer programmes to "help" people to pick lottery numbers.

If sales of this first range of goods are successful, Camelot may launch its own brand of food and drink, including champagne, early next year.

Following the launch to manufacturers, the goods are expected to go on sale in mid- October and sales revenue is expected to be about pounds 10m.

Camelot will receive 10-15 per cent of the sales revenue and "good causes" will receive approximately half of that total. This is in contrast to sales of the lottery tickets, from which good causes receive approximately 28 per cent of the revenue.

"This is something we are doing with the agreement of Oflot," said a spokeswoman for Camelot last night. "The manufacturers pay us a percentage of their sales proceeds, which is between 10 and 15 per cent, and good causes receive 50 per cent of the net proceeds that come to National Lottery Enterprises.

"It's very much a different scale to the lottery itself. National Lottery sales are pounds 100m a week. We expect this to be nearer pounds 10m annually."

But the move is expected to anger charities, which have complained of losses since the start of the lottery. The Association of Medical Charities, for example, which represents 73 bodies, has said its members expect to lose pounds 20m this year.

Many, such as Arthritis Care, have claimed losses as a result of the production of scratchcards. Those that have diversified to try to recapture funds are unlikely to welcome the extension of the National Lottery franchise.

The spokeswoman for Camelot said that she did not think the new products would detract from those manufactured by charities. She said: "All our products are very much linked to the lottery. I don't think there's a crossover between what other charities are doing and these products."

She said the line, which also includes cufflinks, T-shirts and greetings cards, were "very much things that aid the fun of playing the lottery".

An Oflot spokeswoman said last night that the reduced income for good causes from the sale of the manufactured items was due to the risk factor, and of the cost of making the goods.

She did not believe that consumers would buy the items believing that 28 per cent would go to good causes, and she said that the organisation's director general had already considered the issue of how the items might affect charities.

The items produced, she said, would be in direct competition with other similar goods in the market place, and would not be bought "instead of" those produced by charities.

Jackpot winners

Eight tickets shared Saturday's pounds 20.5m rollover National Lottery jackpot, winning more than pounds 2,681,000 each. The winning numbers were 2, 10, 14, 25, 37, 41 and the bonus number was 5.