Camelot pins hopes for National Lottery revival on 2012 Olympic bid

Camelot is lobbying the Government to support a bid by London to host the Olympic Games, in the hope that it will help revive Lotto ticket sales.

Lottery executives have submitted a series of prototype "Olympic Lottos" to the Department for Culture, Media and Sport and are said to be among the most enthusiastic backers of a 2012 London Games. A source close to ministers said: "Camelot and the Lottery are really keen on this. They think it will get people interested in the lottery again and give it a real boost."

Gordon Brown, the Chancellor, and Tessa Jowell, the Secretary of State for Culture, are understood to have dropped their opposition to the London bid. But a cabinet decision has been put off because of the Iraq crisis. Staging the Olympics could cost up to £3bn, and launching a bid for the Games would cost about £17m.

The bulk of the money would be spent on building sports infrastructure and developing land in London. About half would be raised by the Mayor's London Development Agency, which would impose an extra £20 a year on council tax bills in London for six years, starting in 2006.

Ms Jowell believes London and the South-east alone could receive extra revenues from tourism of between £100m and £190m if London stages the Olympics.

Camelot believes it could raise millions of pounds for the Games if it starts the new draws in 2005 and runs them until 2012. A themed Olympic draw would be the first lottery game linked directly to a specific cause. One Camelot executive said: "In broad terms it presents the opportunity to refresh the lottery portfolio."

Ticket sales fell by 5.2 per cent last year, despite a slick advertising campaign featuring Billy Connolly and rebranding the National Lottery as the Lotto. The lottery is now planning a daily draw, mobile-phone draws and an interactive game on Sky to encourage more people to take part.

"There's no doubt that an Olympic bid part-funded by the lottery has great potential," said a Camelot spokesman. "We have already submitted outline proposals to the Government for Olympic-themed games and we will begin detailed economic modelling and product development as soon as the Government makes the decision."

Meanwhile, the Government is expected to advertise in the next few months for a new head of the organisation that administers the money raised by the lottery for "good causes".

The New Opportunities Fund and the Community Fund, which caused controversy last year after giving grants to help asylum-seekers, are being merged into a single body. Government sources have indicated that a new person will be recruited to lead the organisation, which will distribute £1.4bn a year. Lady Diana Brittan, who heads the Community Fund, is not expected to apply. But she is said to want more time in office to ensure that the transition to a new organisation runs smoothly.