Lottery takes the fun out of leisure

Camelot's Arthur and Guinevere are once again the people's champions. The two machines that randomly select the winning numbers in the weekly National Lottery draw are also causing havoc in the leisure industry.

Hundreds of lost jobs already lie in the wake of the lottery, an eight- month-old fledgling, and 200 more were added to their number yesterday at Ladbroke Racing, Britain's largest betting shop operator with 1,900 outlets.

The National Lottery and the recently introduced instant-win scratch cards are collectively extracting pounds 100m a week from the nation's pockets. From zero to annualised turnover of pounds 5bn, it would be churlish to underestimate its financial and social consequences.

Betting shops and the football pools companies have felt the most pain. The outlook for betting shops was good before the televised, random selection of the lottery's first numbered balls last November.

Betting turnover, however, is falling. William Hill, a main rival to Ladbroke in the betting shop stakes, surveyed its regular clientele and found that nine out of 10 were spending between pounds 3 and pounds 9 a week on the weekly lottery draw and scratch cards.

Here lies the heart of the problem. The minimum pricing of lottery tickets at pounds 1 has struck at the core of the leisure industry, which predominantly draws custom from a mass market with low-priced offerings such as bingo, discos, ten-pin bowling, pubs and the cinema.

Preaching from the pulpit about the lottery's sins has become a weekly event among chief executives from leisure companies. The sermons make valid points, but there is a hidden agenda behind the oratory.

The agenda is political, and is aimed at securing a release from the handcuffs of the 1968 Gaming Act, which is as draconian as it is arcane. At its worst, the Act bans the use of the word casino in a telephone directory. And who can explain the logic of prohibiting the sale of alcohol in betting shops while allowing pub customers the freedom to gamble on slot machines?

A great deal of cotton-wool has been wrapped around the lottery to ensure that it went down in the Government's books as a success. However, to have two sets of gaming rules - one for the lottery under the auspices of the National Heritage department and another presided over by the Home Office - can only be unfair.

The legislative playing field really does need to be levelled, particularly since the lottery is already an institution and is not yet displaying any signs of over-exposure. Many leisure companies are at the delicate stage of recovery, and desperately need to be able to stimulate demand through advertising before they become another receivership statistic.

To blame the lottery for all the leisure industry's ills, though, would be wide of the mark. Leisure companies are as much a victim of mistakes of their own making as they are to uncontrollable external events.

Besides the obvious problems arising from the recession and the lemming- like rush into the property market by many leisure companies in the 1980s, the industry is also a victim of its own success. There is nothing to compare with the explosive growth in leisure pursuits since the 1960s, from windsurfing to bungee-jumping off a bridge in New Zealand.

In addition to the marked changes in social trends, the leisure operators have also benefited from the 1960s baby boom. The spending power of today's young workers, excluding those with mortgages, is higher than it has ever been and has considerably swollen the river of cash flowing into the leisure sector.

This growth tracked the increase in discretionary spending until being blown off course by the recession.

The cake has unquestionably shrunk and, at the same time, the lottery has claimed a big slice.

The leisure cake, though, is still huge and the lottery's slice is not as big as its pounds 5bn turnover suggests. This year will see more than pounds 12bn spent on foreign holidays, pounds 19bn on eating out, almost pounds 18bn on beer and pounds 8bn on sports. And many more billions will be spent on other pastimes.

Projections by the Henley Centre for Forecasting for most leisure categories look favourable to the turn of the millennium, and expose the political nature of most of the industry's moans about the lottery.

The message that is not coming across is that recovery among leisure companies will remain patchy for some time, even despite the projected increases in spending. For many independent operators of bingo halls, pubs, clubs and discos, the recovery will not arrive and they will end up participating in the most basic of leisure pursuits - going for a walk.

Leisure spending forecasts

1995 1999

(pounds m) (pounds m)

Beer 13,768 16,271

Cinema 352 570

Eating out 19,054 27,008

Gambling 3,724 6,664

Holidays abroad 12,308 18,498

Holidays in UK 5,276 7,042

Newspapers 2,503 2,883

Spirits 5,738 7,350

Television 4,974 8,114

Video software 1,149 1,926

Henley Centre for Forecasting