Lotto might be nationalised

Nationalisation is one of four options being considered for the Lottery's future amid falling ticket sales.

" What the government should be doing is trying to restore public credibility in the lottery "
John Whittingdale
Conservative spokesman

No changes would be made until 2009, when Camelot's current licence on running the lottery comes to an end.

Ms Jowell said the lottery ticket sales had started very well but as in other countries had declined.

But tickets sales were not the principal reason for the review of how the lottery is won.

Choices ahead

Ms Jowell told BBC Radio 4's Today programme: "Because of the difficulties that we encountered when the licence was re-let two years ago, we've undertaken a review as to the way in which the operator should run."

The four options being considered ranged between nationalisation and essentially maintaining the status quo.

"We could, for instance, have a state-run operator but commissioning games for a range of private operators."

There would be wide consultation before decisions were made, she explained.

Ms Jowell said the way lottery funds were distributed was also under review.

That follows the controversy caused by a grant to an anti-deportation charity, which prompted worries the money was being used for political causes.

Falling sales

Lottery operator Camelot has vowed to resist any government moves to nationalise the multi-million pound game.

A spokeswoman for Camelot said: "We have always known it (state control) is an option and would set out our case as part of any review."

Lotto sales have fallen overall in the past year by 5%, said Ms Jowell.

Tickets sales for the main Lotto game have dropped by 10%.

Raising confidence

Ms Jowell said the government wanted to "stabilise" that decline, focusing on maximising the amount of money produced for the public good.

The idea of nationalisation did not impress Conservative shadow trade and industry secretary John Whittingdale.

Mr Whittingdale told Today: "The government's record of managing businesses is pretty poor."

He argued a nationalised lottery did not seem the best way to raise more money for good causes.

"What the government should be doing is trying to restore public credibility in the lottery and that is not a question of nationalisation, it's a question of where the money goes."

But Labour MP Paul Flynn said it had been a mistake to think a "profit motive" was always the most efficient way to run things like the lottery.

'Obscene' bonuses

The National Lottery was launched in 1994 and its weekly draws were renamed Lotto in 2002, after sales fell for the third consecutive year.

In 1996, Labour threatened to limit its profits amid controversy over what it described as "obscene" bonuses paid to Camelot executives.

The new operator licence was reissued to Camelot in 2001 after a protracted legal process.

The firm took its case to the High Court when the Lottery Commission initially favoured a rival bid from Richard Branson.

In April 2002, Camelot made a £72m gamble by having a huge advertising campaign headed by Billy Connolly and introducing new games.