London 2012 News: Olympics could hit lottery funds

Amid the euphoria of the capital's successful bid to host the 2012 Olympics, the voluntary and community sector was facing up to the prospect of reduced revenues to help pay for it.

The Department for Culture, Media and Sport has confirmed that the National Lottery will provide £1.5bn of the money needed to put on the Games, a measure described as a "straightforward raid" by a House of Commons select committee last year.

About £750m will be diverted from existing lottery revenues. Another £750m will come from Olympic-themed lottery games, to be authorised by a London Olympics Bill, soon to be go before Parliament.

Charities are bracing themselves not just for the impact of the £750m cut, but also for reduced sales of conventional tickets caused by existing players switching to the new themed games.

The NCVO could sponsor amendments to the Olympics Bill in order to safeguard charities' income, according to its head of campaigns, Chris Stalker.

He said the umbrella body still wanted to explore the idea of abolishing the 12 per cent tax on lottery tickets and splitting the proceeds between good causes and lottery players.

"We want the Government to ensure that money coming to the sector is protected," he said.

The lottery operator Camelot has estimated that about 60 per cent of the money raised by Olympic lottery games might come from "sales diversions" from existing games. According to the DCMS, this will mean a reduction in income to good causes of slightly more than 5 per cent over the seven-year period up to 2012.

But a Camelot spokeswoman said the operator was now more optimistic about the effect on good causes. "There is always some cannibalisation," she said. "But the Games will be introduced on the back of increased ticket sales, which is bucking international trends.

"We believe the Olympics will give added impetus to the lottery in general, and an increase in interest across the board."

The SCVO is meeting DCMS officials this week to discuss the implications of the Olympics on the National Lottery. But a spokesman said the sector was expecting reduced income as a result of the changes. "This is just salami slicing, as far as we can see," he said.

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