Lottery sales fall 2% as market matures

Sales of the National Lottery's gaming products fell in real terms for the first time last year, a new report on the company's economic performance has shown.

The report, commissioned by the National Lottery and published yesterday by consultants DKM, showed overall sales rose marginally from £377 million in 1999 to £390 million in 2000. When figures were adjusted for inflation this represented a drop in real terms of 2 per cent.

Mr Colm McCarthy, managing director of DKM, said the figures suggested the market for Lottery products had matured. "The period of natural growth is over," he said.

The report, An Assessment of the Economic Impact of the National Lottery 1987-2001, showed ticket sales in the flagship Lotto game also fell for the first time last year, from £252 million to £248 million. This represented a drop in real terms of 7 per cent.

The results were counterbalanced by a rise in Telly Bingo ticket sales from £4.9 million to £15.6 million.

The director of the National Lottery, Mr Ray Bates, said the findings underlined the need for more product innovation to increase the player base. The Irish experience, he said, mirrored that in other countries, where "after nine to 10 years the market matures".

Last year, he noted, lottery sales - not adjusted for inflation - in the US and UK fell by 2 per cent and 2.5 per cent respectively.

One challenge facing the National Lottery, he said, was the prospect of Europe-wide lotteries offering bigger jackpots than those here. He said the company would examine the possibility of becoming involved in such operations if the alternative would be the "bleeding" of money out of Ireland.

Yesterday's report was the fourth in a series of studies conducted by DKM for the National Lottery. The last one was published in 1996.

It put the cumulative turnover for the first 14 years of the Lottery at £3.6 billion, of which £1.8 billion went in prizes, £1.2 billion to a charitable fund and £579 million on expenses.

Some £423 million of disbursements went to the areas of health and social welfare; £394 million to youth, sport, recreation and amenities; £272 million to arts, culture and heritage; and £73 million to the Irish language.

Four out of 10 respondents to a survey conducted for the report last year said an independent commission should be responsible for disbursing Lottery funds rather than the Exchequer.

Responding to this finding, the Labour Party's spokesman on social, community and family affairs, Mr Tommy Broughan TD, said he did not believe the public had any confidence in the present system, especially with regard to sports grants, where they were often seen to "follow the Minister".

He added: "It is significant that while the lower middle class, skilled and unskilled workers and the unemployed are over-represented among lottery participants, the areas in which they live have not done well from lottery grants".