DCMS predicts 23% income drop

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Lottery income for good causes is projected to drop by 15% in the current financial year, according to new figures from the Department of Culture, Media and Sport, and by more than 23% up to 2009. Camelot’s inability to stem the decline in Lotto ticket sales has caused the DCMS to downgrade its own expectations in this, the first set of financial projections it has issued to the distribution boards for more than a year. The DCMS estimates that the pot of income for good causes will be £1.54bn for the current financial year, down £279m on the 2001-02 income figure. It projects falls of 5% and 3% in the next two years, after which the decline evens out into ‘steady state’ funding.

The Government’s projections are based on Camelot’s sales figures up to June 2002, and confirm a more pessimistic view of the lottery’s fortunes than it gave a year ago, when forecasts were based on the lottery regulator’s view that Camelot’s annual sales would hold steady at £5bn a year throughout the second licence term (2002 to 2009). The new forecast calculates Camelot’s current year sales at £4.69bn, a 3% drop on last year. The notes to the forecast state: ‘…this equals the percentage decline in sales that occurred in 2001-02, and would represent the fifth consecutive year of declining sales’.

The forecasting note also, however, reiterates the view of Secretary of State Tessa Jowell, that ‘lottery fatigue is by no means inevitable’. It goes on: ‘the launch of the new Lotto brand, innovative games and improvements to the lottery’s image may in the longer term result in sales exceeding those imputed here’. Forecasts do not reflect the very poor summer sales, nor any possible negative effect of the NCADC funding row (see story opposite).