Examination of Witnesses (Questions 170
- 189)
THURSDAY 16 NOVEMBER 2000
MR RICHARD
SIDDLE, MR
EDDIE THOMPSON,
MR ROY
TURNBULL, MR
COLIN FINCH
AND MR
TREVOR DIXON
170. Have you sought an urgent meeting, therefore,
with Richard Branson and his organisation?
(Mr Siddle) They are not allowed to talk officially
to ourselves or the media.
171. Until they get the licence.
(Mr Siddle) No specifics of the bids, as part of the
legislation, are they allowed—Camelot or The People's Lottery—to
discuss with the media. Clearly with the process that has been
going through in the last few months elements are leaking out
because things leak and it is in the interests of parties to leak
things that can help their cause. As a recognised body, we cannot
go to them and say "can we have a sit down meeting to discuss
these specific points?" It is of massive concern to us that
The People's Lottery are saying it is going to be a nine month
rollover period and then they are going to churn the stores. What
are the criteria? What is that going to be based upon?
172. Has that not been going on? I find it surprising
if Camelot throughout the last seven years have not been constantly
assessing and reassessing their retailer outlets to see whether
or not they are fulfilling the targets that they have been setting
them. Has that not been going on all the time anyway?
(Mr Siddle) They have and there has been continuous
analysis of the figures.
173. Is what The People's Lottery proposing
radically different?
(Mr Thompson) To answer that, although Camelot have
been doing something, it is usually only when a store is closing
in a particular community and they decide perhaps to give that
Lottery franchise to another store in a similar community, or
perhaps there has been under-age selling and that has been found
out and Camelot has taken the licence away. In general over the
six or seven years since it started, the great majority of the
Lottery retailers who were there six years ago are currently operating
today and, of that, 24,000 are online. What we have done though
is got the message through to The People's Lottery of what our
feelings are and our concerns through the Neighbourhood Lottery
Alliance. We have written to Mr Branson and we had a meeting with
his Chief Executive but that was a long time ago, just as the
submissions were going in, and we explained our concerns on behalf
of the independent trade. We believe that the existing network
must continue throughout the UK which includes our side and includes
supermarkets, etc., because it is very successful. We have also
confirmed, Mr Maxton, the problems and concerns we have about
the viability of many outlying stores in the community, the smaller
stores. Without the Lottery income they would no longer be viable.
We put that over to them.
Chairman: I hope colleagues will forgive
me but everybody wants to speak and there is a limited amount
of time, so if we can move fairly briskly.
Derek Wyatt
174. Good morning. Can you tell me how it actually
works between you and the Lottery? Virgin last week—Sorry,
not Virgin. God help us! The People's Lottery last week said that
they would be able to roll out the terminals at a speed that Camelot
basically said was impossible. Do you believe that?
(Mr Finch) It is very difficult for them to put in
a plan and recommend that they can do it in such a short space
of time, or any space of time, when they admitted at one stage
they do not know the network, they do not know the locations of
them, they do not know what machinery they are going to introduce
and at what level the games are going to kick off. What is in
the bid is a whole host of things. On the one hand they were telling
us some time ago they would have to have a minimum of 12 months
and then last week I heard three months. I would suggest to you
that at this moment in time they do not really know because they
do not understand the network. This is a hand in the dark for
them, you know. They would have to go around all these retailers
first and it is back to how quick can it be done, how quick can
a retailer be introduced to new games and retraining.
175. Forgive me, we probably do not know too
much about that aspect, so help us here. Let us assume that on
the 1st of something The People's Lottery wins, what physically
will happen? You will lose your terminal at some stage or there
will be a takeover where perhaps The People's Lottery would say
to Camelot "can we just borrow them for six weeks because
we do not want this to go down", we cannot let the Lottery
go down, as it were, and they have already extended the time period.
How much time do you need in each shop for someone from The People's
Lottery to come, fit it, test, test again, double check and so
on?
(Mr Finch) If they are based on Camelot's existing
type of machine, they are plugged in and set and can be done in
less than 20 minutes from that point of view just into the mains,
as it were. It depends on what field staff they have.
176. It depends on?
(Mr Finch) On how many field staff they have got who
can undertake this job. When Camelot had the Lottery originally
six years ago they did it in waves.
177. They told us that last week.
(Mr Finch) They committed so many in such a time and
then built up. We have got 25,000 existing retail operators who
you would expect would want the machine from the last day of Camelot
to the first day of The People's Lottery. Not so much for the
retailer, we must not lose sight of the fact that the public would
want the machine in there.
178. It seems to me you would be having two
really.
(Mr Finch) This is a problem.
179. Therefore, do you have the space?
(Mr Finch) No.
180. It is quite a problem. You are selling
everything, you are open all hours as they say.
(Mr Finch) We cannot quite understand how we are going
to manage the payment of prizes in the six months that Camelot
are going to remain open after the changeover, if they lost the
franchise. Would the new terminals be able to pick up the bar
codes of Camelot's tickets or would we have to run two terminals,
one to pay and one to take in? How would we manage the cross-reference
of money? It is a very difficult thing for an ordinary retailer
and all of these questions are going through our minds. Just as
you are uncertain of it, so is the retail trade.
(Mr Thompson) We find it difficult to understand how
The People's Lottery could make a comment as to how quickly they
could do this change when they do not even have the list of where
the retailers are at this stage. They do not even know what the
Lottery network is because Camelot has got that.
181. I did notice in their questioning last
week their actual overhead cost is about £70 more than Camelot
which does seem to suggest that these overhead costs are these
types of things that they have resolved. Both Camelot and The
People's Lottery did say that they would like to use the additional
band width for other things. Given that you have a key location
of where you put your Lottery terminal, because you want foot
fall and you want people to dither and have a look and do all
the things that make people buy whatever they buy in your shops,
what apprehension would you have on the single terminal if there
was also a facility for e-mail or for online banking or for paying
rates or whatever? Would that confuse the issue or would you feel
that you would need more terminal space, two terminals, or what?
(Mr Turnbull) Obviously we are apprehensive about
that situation, as has been said before, not forgetting if you
win a prize with Camelot you have got 180 days, so six months
virtually, to claim that. We are not sure of the equipment one
way or another. Within that six months you could have one unit
there and one unit there and some retailers will be able to allow
the space, others will have a severe problem. We have got to go
back to when Camelot got the franchise in the first place. Their
training scheme was first class. As Colin has intimated, every
retailer was taken to an hotel and trained and that was followed
through over the years into Gold Awards, Silver Awards, Bronze
Awards. It was a continuous training scheme through their field
staff making our staff aware that if they get a Gold Award that
is excellent, good for the punters, good for the staff, good for
the team, good for Camelot. We are not sure at this stage what
training facilities there would be with The People's Lottery.
Obviously if there was a change from GTech to AWI, the American,
we are not aware of the difference. One of your questions was
whether you take e-mail. I did note with some concern about renewing
driving licences or post office facilities. I would not like that
at twenty-five past seven on a Saturday night. As a retailer I
sell electric tokens and gas tokens from a separate machine and
you are operating the Lottery with staff on there. Doing it from
the same machine would be horrendous. We never take the general
public for granted because they can do strange things at that
time of night.
182. And the odd Member of Parliament does as
well.
(Mr Turnbull) I think there are punters out there
who want to be the last in the country to get the Lottery on at
twenty-nine and a half minutes past seven, for instance.
(Mr Thompson) Ninety per cent of Lottery play takes
place between five and seven o'clock on a Wednesday and Saturday.
I read last week you were talking about making it 24 hours, we
would not be against it being 24 hours but we cannot see a lot
of play between eleven o'clock at night, when we close, and seven
o'clock in the morning. We do not see any great advantage in that.
We are not against Internet play either but there would have to
be some kind of registration linked with the local retailer because
we have to be very careful, we do not want it abused by those
who are under-age. We are quite keen to go into all of these areas
as long as they are controlled.
Mr Keen
183. Can I follow on from what Derek has been
asking. Can you describe the problems you have on a Saturday,
for instance? You must have some extra staff on at that time.
Can you just describe what it is like coping with that?
(Mr Turnbull) Obviously, in time, as more terminals
came in it quietened down slightly. In my first few weeks I was
taking £13,000 a week because I was the only terminal for
a radius of seven miles. That was unbelievable, people queuing
out of the door, etc. Then 100 yards away somebody else got a
terminal and it halved but you still have to have extra staff
particularly, as Eddie was saying, on Wednesday night and Saturday
night, but it is good for business. As has been said before, there
are thousands of small retailers who would go out of business
without the National Lottery. We are concerned about not knowing,
as has been said previously again, and I am sorry to keep saying
that, the difference between what The People's Lottery will do
if they get the franchise and if Camelot retain it. In the retail
sector we need some confidence that we will maintain the same
outlets, whether it be for six or nine months remains to be seen.
It is a very difficult period of time for us all.
(Mr Thompson) Roy was talking about the viability
of the retailers but it is not only that you have got to consider,
you have got to consider the consumers who play the Lottery. If
some of the Lottery terminals were transferred away from some
of the independents and put in some of the superstores you would
find that out-lying communities would not be able to play the
Lottery and that would be totally against the whole adage of the
game itself.
(Mr Finch) Can I come back to the problems that you
were suggesting you would like to hear about. When everything
is working perfectly, there are no problems with the network and
the customers and the general public are coming in and their play
slips are dry and not creased, we can all produce a Lottery ticket
from £1 up to £49 within four seconds, so we can move
people who are just predominantly coming to the station to buy
a Lottery ticket. That can be very, very effective and there are
very few problems. But when it has been raining and they come
in out of the car and they have got a drop of rain on it, it goes
into the machine and it just does not take it, so then you have
got to write it out all over again. There are some operational
problems but by and large the Camelot way of delivering Lottery
tickets to the general public is very, very good and there are
no problems there apart from minor ones.
184. I am sure that at six o'clock on a Saturday
night and on a Wednesday you do not have any dialogue with people
other than "thank you very much, here is your change".
Do you get much of a dialogue with the punters, the people, about
the distribution of the prizes?
(Mr Finch) Yes.
185. What do they feel about things?
(Mr Finch) In the beginning when I first started selling
it a lot of people believed that some of the good causes were
going to be the Health Service, kidney machines and heart research
and things of this nature and the way the public perceived it
it was for good causes. Some of the effects of the bad side of
the Lottery are the monies that have been pumped into the Dome
and Covent Garden. From the people who came into the shop in the
early stages to buy a dream for a pound or £3, whatever the
stake was, they were happy in their conversation about buying
the dream but a lot of players have dropped off because of the
effects of the Heritage Department pumping in money where the
people that I serve do not believe it is relevant. They certainly
did not believe in the Dome or Covent Garden and things of that
nature. They associate it with being a tax on the poor for the
patronage of the rich. There have been problems of that nature
in the perception of the PR of what happens to the money.
186. Has anybody else got any experience of
that?
(Mr Turnbull) I remember the local vicar saying to
me "I am not in favour of this operation but the one thing
the Lottery has done is make people talk to each other".
It had a tremendous effect, and it still does. If they are standing
in the queue they are talking about how many ten pounds they have
won, etc., so it has a social run-on as far as people talking,
which I think in this day and age is quite important. From a staff
point of view, it is a battle of who can do it quickest. As Colin
says, it is very quick, it is very efficient and it has done something
for the general public that has never really been there before
and long may it continue as far as the retailers are concerned.
(Mr Thompson) Most people bet on the Lottery regularly
because even when they go on holiday they still place bets over
several weeks because they are worried it will come up when they
are not there. What you have to watch if there are any major changes
made to the games is that it does not turn off any of what I have
just said. If it changes, and the fact is you have been doing
it for the last two or three years, some people may drift away
and, therefore, you would lose turnover in that fashion.
Ms Ward
187. I notice in your submission that you talk
about some of the uncertainty of this whole process and the fact
that, as you have said today, you have not had the opportunity
to get information. You say there has been speculation that "priority
will be given to retailers stocking other products supplied by
bidders and their partners" when you referred to The People's
Lottery. As I understand it from the evidence we heard last week,
some of the partners to The People's Lottery are Kellogg's, Microsoft,
Compaq. Are you suggesting that you are going to be encouraged
to have Microsoft or Kellogg's cornflakes or something else along
with your products? Perhaps you can explain that a little bit?
(Mr Thompson) I think the name was mentioned earlier
on, Virgin, and I think you are well aware there are certainly
Virgin products which are sold within retailing within the UK.
There has been some speculation that it may be helpful for you
to get a National Lottery terminal under The People's Lottery
if you are linked in some way to the Virgin products. That is
sheer speculation, I am not saying that.
(Mr Siddle) What we are trying to make clear is that
retailers are committed to the Lottery, that the Lottery works
well through neighbourhood small stores. If anything comes in
that allows you to do other services through the terminal or the
actual operator requires you to do other facilities as part of
your being an operator of the Lottery, that should be very carefully
thought through. Through our submission we would want to make
it clear to yourselves and to the Commission that that aspect
of introducing new terminals that are all-encompassing needs to
be very carefully planned. As they said last week, they are looking
at those opportunities and would only ever do it if the Commission
required them to do so. We are putting our concerns that it could
work, but how can it work?
188. But this is speculation, you have no evidence
from your members of comments from suppliers of any sort because,
of course, you would report that to the Commission, would you
not?
(Mr Finch) None whatsoever, none at all.
189. Perhaps I can ask about what Camelot referred
to last time as community terminals, that I think you referred
to a moment ago. They say there are about 1,000 that cannot be
justified on any profitable basis. Would you say that is about
the right figure or do you think it is more or less?
(Mr Dixon) Within our membership it is difficult to
actually get hard evidence of the number but I would say that
figure is probably about right, yes.
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