Pools companies step up campaign against lottery

LOBBYING against a state national lottery is intensifying as Peter Brooke, Secretary of State for National Heritage, prepares to bring the lottery Bill before Parliament next week.

The pools companies, who fear they will lose millions of pounds worth of business to a lottery, are to meet Mr Brooke and are likely to be offered some key concessions if a lottery goes ahead as planned in 1994.

They say that to compete on a 'level playing field', pools companies must be allowed to collect coupons and stakes at shops (they often do but it is officially illegal), advertise on television and radio, operate jackpots rather than have to give prizes based on the same week's income and pay no more tax than the lottery.

Malcolm Hughes, managing director of Vernons Pools, who has updated that organisation by designing coupons as lottery tickets and allowing credit card and freephone betting, said that Vernons would definitely be put out of business by the national lottery if the company did not receive from the Government the concessions outlined above.

He said: 'There has been a big change in how people use the pools. Ninety per cent of people use the same numbers every week. In other words they use it as a lottery. People who really want to bet on football use bookmakers. So a lottery will take custom away from us. In any market there's only room for one big prize competition.'

Mr Hughes said that Littlewoods pools, with pounds 700m a year turnover and 80 per cent of the market, would survive with a much reduced clientele while Vernons, with pounds 170m and 20 per cent of the market, would fold.

The lottery would attract 5 million players immediately and eventually get 10 million, he predicted.

Two years ago the pools promoters managed to convince the Treasury not to go ahead with the lottery but now that the Conservatives have promised it in their manifesto they will not have the same success again.

It looks likely, however, that the Government will grant them concessions, particularly on television advertising.

It has been reported that Hayden Phillips, the heritage department permanent secretary, has sent a memo to Mr Brooke saying that the lottery could mean 1,100 people in the pools industry being sacked.

However, department sources said yesterday that Mr Phillips was describing the worst scenario in that memo and it was not necessarily his view that this would happen.

It certainly is far from proved that punters will simply drop long- term habits of doing the pools because of the additional betting outlet of a lottery.

There is no exactly comparable situation abroad to give confidence in any research done so far that the pools companies' scare scenarios will necessarily prove accurate.

Mr Brooke will tell Parliament that to make the lottery as attractive as possible it should consist of more than one game - a simple scratch card with small instant cash prizes, and a computerised lotto game with pounds 1m jackpot prizes.

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