The National Lottery would benefit from competition

Internal links

Camelot accused over £5bn Lottery funding shortfall

Bad news for good causes. The National Lottery operator, Camelot, has announced that it will fall some £5bn short of its fundraising targets for the good causes it supports throughout the land. This is a cause for regret. It is also, however, a moment to reflect on the consequences of relying on the lottery to enrich the "New Opportunities Fund" for schemes in schools and hospitals that should often be the responsibility of the taxpayer. If nothing else, this shortfall in funding highlights the dependency of some public schemes on the public's propensity to gamble and on the marketing skills of one company. If a fall in lottery funding hurts public services in any way, then there is obviously something wrong with the system.

However, one change to the lottery might lead to more stability in its revenues as well as a better deal for players: more competition. It has always been curious that, in contrast to so many other forms of gambling, the lottery is considered to be a natural monopoly. Because the potential for fraud and misleading claims in lotteries is very high, such activities have to be carefully regulated, and for that reason we would not advocate a complete free-for-all.

But there is no reason why, say, two or three "fit and proper" companies might not be allowed to operate in competition with one another. Sir Richard Branson and Camelot should test their bitterly contested claims in the marketplace.

The downside is that such a move might not just result in more consumer choice and people switching from one "brand" to another but would result in a higher overall level of gambling. And that is a problem because of the well-observed tendency for the lottery to act as a regressive tax, with tickets being bought in disproportionate numbers by those least able to afford them. Like tobacco, a form of "health warning" about gambling addiction, coupled with some information about the extremely remote odds of winning the jackpot, should be visible at points of sale and on tickets.

Realistically, the lottery is here to stay, and we have to find ways to minimise its social costs and maximise its social benefits. Competition is, on balance, and with safeguards, probably the biggest single change that would benefit both players and good causes. But we remain queasy both about the social effects of gambling and about relying on such a capricious source for the funding of sometimes important public projects.