Good causes show results for Camelot

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The lottery operator is gambling on feel-good promotion to reverse its fortunes and bankroll the 2012 Olympics. Jane Taylor reports

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The lottery operator Camelot has directly linked the promotion of good causes with an upturn in sales for the first time. At a news conference last month to unveil game development plans over the next few years, Camelot’s marketing director, Jo Kenrick, highlighted a recent TV ad that featured a lottery-funded mountain rescue team promoting the Hotpicks game. She said: ‘That ad… has moved the baseline of sales up by 10% and that’s a benefit we will continue to have over months to come.’ 

Camelot believes its current promotional strategy, combining ‘real people’ –whether celebs or punters – and good causes, is paying off. Kenrick said the positive sales effect was similarly evident in another ad featuring the lottery-funded athlete Ashia Hansen. And the benefits, she claimed, work both ways. ‘Since we launched this cam-

paign, attitudes to good causes, which we track on an ongoing basis, have improved significantly. … It is a very early indication, but a very positive indication.’ She added: ‘This approach… demonstrates in a very concrete way joined-up working between ourselves as the licence holder, DCMS and the distributing bodies.’ Camelot’s strategy for growth and Olympics plans were launched just a week ahead of its latest annual sales figures, which confirmed the continued downhill slide of the company’s fortunes. In the year ending March 2003, sales were down 5.4%, and sales on the main Lotto game down 12%. By contrast, non-Lotto sales were up by 21%. Money going to good causes was £1.38bn, and Camelot’s profits were down 27% to £42m.

The lottery operator now decisively accepts that the main Lotto game will continue to decline, and it is putting all of its efforts into new non-Lotto games, to bring its sales portfolio more into line with other countries’ lottery operations. The two big new game plans are for a daily draw, scheduled for launch this autumn, and a European game, due to begin spring 2004. The daily draw has prizes of £5 to £30K and a one-in-eight chance of winning, Camelot says. The European game could have jackpots of up to £30m.

Camelot also introduced its early thinking on an Olympics lottery, hard on the heels of the Culture Secretary’s official confirmation on 15 May that London would bid to host the 2012 games. All of Camelot’s Olympic ideas are based on the expectation that it will be empowered to run themed or hypothe-cated games – where players know ahead of their ticket purchase that the proceeds

will go exclusively into a dedicated Olympic Fund rather than the general distribution pot.

An Olympics lottery will need primary legislation to establish a new good cause. The DCMS is hoping to introduce a bill in the coming 2003-04 parliamentary session and departmental sources confirm that the themed power will almost certainly be specific to the Olympics rather than a general enabling power for the operator. Themed lotteries may, however, be on the horizon. The Secretary of State is thought to favour the notion of dedicating draws on specific days to a heavily promoted single cause, and Camelot executives were notably enthusiastic about the themed approach at their press event. Dianne Thompson, chief executive, said: ‘It’s something I believe will prove popular with our players because for the first time they will know exactly which good cause their money is supporting.’

Who pays what, how and when, Olympic games

And chairman Michael Grade, when asked whether he would like to see more hypothecation, said: ‘I think we’ll see how it goes. It’s going to be very, very interesting. We think it’s going to work pretty well.’ If the legislative timetable runs smoothly (see xxx), Camelot plans to launch its first dedicated Olympic offerings next spring, a year ahead of knowing whether London has won the bid, building up slowly to 2012. In the event of the bid being unsuccessful, Thompson said: ‘Any money that has been raised would then be used for training of athletes or to supplement the money for our own teams.’ Tessa Jowell, in her parliamentary announcement on 15 May, said the lottery’s contribution to the Olympic Games would be £1.5bn, out of a total funding package of £2.375bn. This contribution would be split between funds raised from the newOlympic fund and £750m drawn from the existing distributors.