26. Memorandum submitted by
Novamedia
REFORM OF THE NATIONAL LOTTERY
As an executive of the Dutch Charity lottery
operator Novamedia, I have been made aware of your request for
comment from the Lotteries Council on the proposed reforms of
the National Lottery.
Our interest in the matter arises because we
are the second largest lottery operator in Holland with annual
sales of 764.2 million Euro and are currently examining the possibility
of establishing a charity lottery in the UK.
We felt it may be helpful to share with your
Committee the experience we have had in Holland where our decision
in 1991 to launch a competitor lottery to the Dutch National Lottery
has resulted in sustained growth of both the National Lottery
and our own.
Let me briefly introduce our organisation to
you first. Novamedia was founded as a not for profit company in
1983 in Amsterdam, specialised in operating and servicing lotteries
for charitable causes. During its existence as a lottery operator,
Novamedia has collected some 3 billion Euro for a total of 114
charity organisations with annual donations showing stable growth
(see graph below for the donations made by the Postcode Lottery,
one of Novamedia's lottery concepts).
When Novamedia started their lotteries the National
Lottery feared they might lose market share. But 14 years of experience
has shown that even heavy marketing of our concepts has not cannibalised
the sales of the National Lottery. On the contrary: the sales
of the National Lottery were declining before we started, but
has shown sustained growth, as has the Postcode Lottery, from
the moment we were on the market (see graph below).
We believe that the attitude of Government in
the UK has been unduly protective of the UK National Lottery and
that the lack of effective competitive stimulus has been unhelpful
in achieving the overriding common objective of maximising the
amounts of monies raised for good causes.
We note that it is being proposed that a competitive
element be introduced by permitting additional operators to bid
for elements of the National Lottery products other than the main
draw(s). In our view this is unlikely in itself to promote the
kind of competitive stimulus that the emergence of a credible
competitive lottery can achieve. For this reason we would urge
that consideration be given to creating the potential for a genuine
competitor to emerge through the more aggressive deregulation
of the section 5 society lottery sector.
We would be happy to make ourselves available
to appear before you to provide you with an opportunity to gain
a deeper understanding of what has happened in Holland should
this prove helpful.
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