Could the Lottery rescue Olympic bid?

London's Olympic bid has already run into difficulties

By Torin Douglas BBC media correspondent

A Cabinet committee is meeting - ahead of a main Cabinet meeting on Thursday - to consider whether to recommend government backing for a London bid to host the Olympic Games in 2012. One factor will be whether the Lottery could raise more than a billion pounds towards the costs.

Sir Richard Branson has said he'd like to run a special Olympics Lottery game to raise the money.

Others are more sceptical, saying it would take money away from the existing good causes.

Over the next 10 years, surely the Lottery could find another billion (or a bit more) to help bring the Olympics to Britain?

It's a deceptively simple answer to the question of how to help pay for the Olympics.

Under last week's agreement between London mayor Ken Livingstone and the Culture Secretary Tessa Jowell, Londoners would pay £1.1bn of the £2.6bn budget, leaving the government to find the rest.

And what better way than by raiding the Camelot cookie jar? The Lottery has already raised over £12bn pounds for good causes (even though few can name a lottery project in their area).

Digging deep

Over the next 10 years, surely it could find another billion (or a bit more) to help bring the Olympics to Britain?

Undoubtedly it could - but should it, and if so how?

Camelot and its regulator, the National Lottery Commission, won't say what advice they've given ministers in recent days. But the Culture Department has been testing all the lottery options.

The chairman of UK Sport Sir Rodney Walker suggested redistributing the existing "good cause" allocations - boosting sport's share, so an Olympic Fund would not take money away from grassroots projects and the elite athlete scheme.

He proposed cutting the proportion going to charities and health, education and environment projects.

Cold water was poured on that idea.

Bill Bush, Ms Jowell's special adviser, told the Sunday Telegraph: "What we are looking at is something in addition to the good causes.

"If you love heritage buildings or the performing arts or medical charities, to have a senior sports figure saying 'You've got too much money and I want it' is not a helpful contribution."

Poor ticket sales

But can the Lottery find a billion pounds or more without damaging the existing good causes?

Ticket sales are already in the doldrums - 5% down, year-on-year - despite last year's £72m relaunch under the now-discarded slogan "Don't Live A Little, Live A Lotto".

The government's now trying to claw money back by merging two of the "good cause" bodies - the Community Fund and the New Opportunities Fund - to cut running costs.

An Olympic TV draw might detract from the main Lotto game and could fall foul of tight television regulations

And that's before it relaxes the gambling laws, increasing competition for the Lottery.

So where would the extra money come from?

Tessa Jowell has floated the idea of a special Lottery game to fund the Olympics.

This might attract people who don't currently buy tickets but want to bring the Games to Britain.

It could be advertised with emotive pictures of Britain's gold-medal winners. And by focusing directly on one good cause, it might give a new lease of life to the Lottery as a whole.

Game options

But what sort of game should it be - a scratchcard or a TV draw - and for how many years would it have to run?

Scratchcards raise far less money than Online games and have been criticised for being more "addictive" for vulnerable players.

Yet an Olympic TV draw might detract from the main Lotto game and could fall foul of tight television regulations.

Either way, the law would need to be changed to create this new "good cause".

At present, takings from all National Lottery games are split the same way - one sixth each to sport, the arts and heritage and one third to the newest good cause (set up by Labour when it came into power), the New Opportunities Fund for education, health and environment projects.

Special lottery tickets could be sold

Would the Olympic Fund take all the money from the special game, however successful - or not - it proved? Or would it take a fixed percentage of a bigger Lottery total, hopefully boosted by the Olympic buzz? And how could anyone guarantee it wasn't taking money from the other good causes?

One Lottery expert, Ian Walker, professor of economics at Warwick University, is not in favour.

He told the BBC: "It doesn't seem right that we should make decisions on whether we should host the Olympics on whether or not we can sell Lottery tickets.

These things are totally unrelated and by linking them together we run the risk of more empty Domes and the like.

The problem about offering a lottery ticket that is linked to an Olympic "good cause" is that the money may be raised at the expense of existing good causes."

And of course an Olympic Lottery would set a huge precedent - paving the way for any other large enterprise the Government wanted to support, but not pay for.