Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Memorandum submitted by The Betting Office Licensees Association (BOLA)


  1.1  The Betting Office Licensees Association (BOLA) is pleased to respond to the invitation of the Culture, Media and Sport Committee to submit evidence to the Committee's inquiry into the Operation of the National Lottery.

  1.2  BOLA is the off-course betting industry's principal trade body. Membership comprises more than 5,400 of Britain's 8,300 licensed betting offices, including all of the major bookmaking companies.

  1.3  Some of the matters on which the Committee has invited comment are not relevant to the betting industry and on these we offer no response.


  2.1  Both of the companies currently competing for the new National Lottery licence have committed themselves to raising sums for good causes that are generally regarded as unrealistic. It follows that the Lottery is certain to be promoted even more aggressively than before.

  2.2  Regardless of the identity of the new operator, pursuit of already stated objectives is bound to include increased marketing and advertising and the introduction of new games, with a consequential further damaging effect on other betting and gaming operations.


  3.1  BOLA has proposed to the Gambling Review Body that the minimum age for all forms of gambling, including the National Lottery, should be 18.

  3.2  It seems to us that with the Lottery being so widely available the reality is that youngsters well below the legal maximum age will always be able to gain easy access to Lottery tickets and Instants. A minimum age of 18 years would, therefore, seem justified.


  4.1  Because betting is a hard form of gaming, BOLA has advised the Gambling Review Body that the embargo on bookmakers advertising on television and radio should be retained. Nevertheless, the National Lottery gains significant competitive advantage over others in the gambling sector by being able to advertise on television.

  4.2  Realistically, we recognise that this privilege will not be withdrawn, but the benefit it confers should be acknowledged in the form of reasonable concessions to other operators. In the case of bookmakers, a reasonable and readily available solution would be to allow betting on the outcome of the Lottery.


  5.1  During the passage of the National Lottery Bill, the Home Office undertook to monitor the impact of the Lottery on the Horserace Betting Levy.

  5.2  This commitment was given in response to concerns that this new gambling product would erode off-course betting turnover and, therefore, the Levy. Responsibility for this monitoring was given to the Economics and Resource Analysis Unit of the Home Office's Research Development and Statistics Directorate.

  5.3  In each of the past five years, the Economics and Resource Analysis Unit has found that the Lottery increasingly has had a negative impact on turnover and the Levy.

  5.4  The latest report, published earlier this year, concluded that off-course betting expenditure in 1999 was around 14.7 per cent below the level it would have reached in the absence of the Lottery.

  5.5  Whilst the object of the Home Office exercise was to measure the impact of the National Lottery on the Levy, it is obvious that a loss of turnover of this magnitude was, and remains, extremely serious for the betting industry.

  5.6  In 1996, the Henley Centre estimated that off-course betting turnover in 1995 had been 8.5 per cent lower than would have been the case had there been no Lottery.

  5.7  The Home Office's estimate for 1995 was a somewhat greater loss of 11.8 per cent. However, both these figures preceded the introduction of the midweek draw, which accounts for the rise to last year's deficit of 14.7 per cent. The position today would be even worse but for the one per cent reduction in betting duty implemented in March 1996.

  5.8  Henley also found that in 1995 betting office profits were 35 per cent lower than they would have been in the absence of the Lottery. Similarly, the Horserace Betting Levy was £5.4 million down, overall Government revenues from betting had fallen by £82 million, 400 betting offices had closed by the end of 1995, and more than 3,400 industry jobs had been lost. Today, the number of operating licensed betting offices is an estimated 8,100 compared to 9,300 immediately prior to the Lottery.


  6.1  When the Irish National Lottery had a similar effect on the betting industry in that country, Irish bookmakers began taking bets on the draw. This involved customers placing side-bets on numbers they had, in all probability, already nominated for the Lottery.

  6.2  Side betting on the Lottery became a popular product in Irish betting offices without inflicting any discernible damage on the Lottery, to which betting was generally regarded as adding an extra element of entertainment.

  6.3  As it became apparent that the UK National Lottery was seriously eroding turnover and profitability, BOLA asked the National Heritage Department (now the Department for Culture, Media and Sport) to remove the prohibition on bookmakers offering side bets.

  6.4  In May 1996, the National Heritage Committee recommended that betting on the Lottery should be permitted, and according to newspaper reports the issue was debated in Cabinet. However, the lobby was effectively halted by the announcement of the 1997 General Election.

  6.5  The National Lottery is the only future event that bookmakers have ever been legally prevented from betting on. Good taste may have prevailed on a number of occasions, but Government has never before intervened to make a particular type of bet illegal.

  6.6  The anomalous nature of this ban is illustrated by the fact that Irish bookmakers can bet on the UK Lottery, as can offshore operators. Similarly, UK bookmakers can bet on any Lottery in the world, with the sole exception of their own.

  6.7  It seems incongruous, to say the least, that UK bookmakers should be prevented from betting on their own lottery whilst their customers can have such a bet without paying UK betting duty simply by making a toll-free telephone call.

  6.8  It is appreciated that, in the early days, Government was determined to ensure the Lottery's success, but given the unassailable position it occupies in today's gambling market, BOLA contends that side betting could do it no harm. Indeed, the added interest betting would bring might help the new operator stimulate even greater interest in the twice weekly draw.

  6.9  The assertion that side betting would not damage ticket sales in based on the now well-established fact that the overwhelming attraction of the Lottery is the Jackpot—the chance, no matter how small, of becoming rich overnight.

  6.10  If the embargo on betting were lifted, bookmakers would undertake not to bet on six numbers, although, in reality, such a commitment would be unnecessary because not even the largest bookmaking companies could afford to pay a customer who nominated six correct numbers. Thus betting would be on five numbers at most.

  6.11  Given the many advantages conferred on the Lottery and the impact it has had on betting, BOLA believes that the ban on side betting is unfair and has raised the matter with the Gambling Review Body.

  6.12  The support of the Culture, Media and Sport Committee would be greatly welcomed. We would be pleased to provide further information, or to appear before the Committee, if required.

September 2000

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