Leading Article: Questions the lottery must face

Listen to Virginia Bottomley, the Secretary of State for National Heritage, and you would think that everything in the lush garden which has grown up around the National Lottery is wonderful. It's not. She fudged the serious allegations made last year by the entrepreneur Richard Branson against the parent company of the lottery operator, Camelot. But the questions about what has become so familiar a part of daily life for so many will not go away. The way scratchcards are working poses fundamental questions about the lottery: she is obliged to the millions who pour money into the competition to answer them.

The principle of a lottery, most of the proceeds of which flow into "good causes", is a good one. Without it, the feelgood factor deficit would be even bigger. The enthusiasm with which people young and old, high and mighty, join in the weekly draw is spontaneous and genuine.

But doubts surround the way the lottery is practised. This is public money, literally if not officially. The way it is collected and distributed demands scrutiny. Yet the official scrutineer, Oflot, under the leadership of the ineffective Peter Davis, is not trusted as a regulator should be. The minister responsible - the ever-smiling Mrs Bottomley - must accept that, after 18 months, there are aspects of the operation of the National Lottery she does not know enough about, such as the sale of scratchcards to young people. It is time she set up a review, for even if she does not think she needs information and assessment, we, the punters, do.

The agenda for such a review begins with scratchcards. By law, Oflot must not licence any game that encourages "excessive gambling". That is imprecise, but anecdote suggests Instants do encourage patterns of play and spending which warp the original conception of the National Lottery. Why is anecdote all we have to go on? Because Oflot has not bothered to find out who bets on scratchcards: it has, till recently, done virtually no monitoring or research. Reports suggest children are avid buyers of the cards. The police are worried. Yet no action has been taken, perhaps because the Home Office, responsible for gambling and charities, does not even seem to be talking to the Department of National Heritage.

After that comes the distribution of lottery funds. After a rocky start, the lottery grants boards are up and running well. But are the respective shares of sports, arts, heritage and charities right? More money should go to help the poorer, for that would mitigate the lottery's regressiveness. That is not to say the geographical distribution of funds highlighted in this week's report from the Directory of Social Change is skewed. Some of its figures for per capita receipt of lottery money are meaningless since they are not weighted for the fact big arts companies are concentrated in London. They do not allow either for the fact the lottery boards can only pay out if applications are made. Some parts of the country and some deserving groups have been backward in coming forward. (The review ought to study the cost of making grant applications and whether procedures can be simplified.)

The other main object for the review should be the lottery's commercial basis. Camelot plc is a monopolist. Oflot's task of assessing its costs and profits is made all the more difficult because it lacks directly comparable data. Is that situation immutable? All the other regulators, even the director-general of Water Services, are making efforts to bring competition to bear, however haltingly, on monopoly suppliers. Camelot plc may have a contract with several years to run, but that must not make it immune from question and challenge. The lottery is successful and strong enough to withstand some more probing.