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privilege will not be withdrawn, but the benefit it confers should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
5. IMPACT OF
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
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
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
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 Jackpotthe
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,