NEW MEDIA: SPOTLIGHT ON LOTTO - Can Lotto compete online with the net's other gaming offers?

Is Lotto going to reach more players with the help of the net? Alasdair Reid doubts it.

Billy Connolly may not strike you as the sort of geezer who has much time for the internet. He may spend many happy hours each day in cyberspace - but that's hardly the point. Connolly's showbiz persona is as the banjo-playing ex-welder who's not afraid of drawing attention to the Emperor's new suit of clothes. He's the belligerent opponent of all that is pretentious and the champion of good honest simple folk.

As such, he's the perfect front man for the National Lottery, now renamed Lotto, because the lottery is played predominantly by simple folk. They may be altruistic at heart but, to be blunt, are old and downmarket. Visit a newsagent near an old people's home on a Saturday morning and just see how long it takes you to pay for your newspaper.

All of which perhaps explains why Camelot's strategy as regards the digital world has often seemed less than inspired. In fact, it has often had to be poked and prodded by the Government.

The culture secretary, Tessa Jowell, is keen for the lottery to make full use of digital channels, in line with its desire to encourage cost cutting and promote the widest possible access. A recent report from her office outlined possible plans for the next lottery licence period: "The National Lottery Commission might, for example, issue one licence for the main online game, a second for scratchcards and a third for new internet games."

Back in May, the Camelot chief executive, Dianne Thompson, announced a £45 million digital investment programme, the first stage of which was a revamped website and it has been clear that the ultimate aim will be to allow people to buy tickets online. So far, all that's on offer are scratchcards (click on the area you want to scratch) and access to subscription forms, allowing you to play many weeks in advance. Unfortunately, you have to print off the form, fill it in and post it back to Camelot.

Things, though, might be about to change. Last week, Camelot announced it was reviewing its digital advertising arrangements. Ostensibly, this will involve a pitch for the digital creative work (the incumbent is WCRS) - but this could indicate that the company is now willing and able to make the great leap forward. Is it about time? Or is digital actually an irrelevance for the Lotto audience - no matter what the culture secretary thinks?

Well, perhaps. Camelot sources say that first of all they'd like to lay to rest all that hoary old stuff about its target market. The demographic profile of lottery players, they insist, almost exactly matches the demographic profile of the country as a whole. A surprising 73 per cent of the adult population still claims to play at some point across the year.

The only profile where Lotto is noticeably down is in the 16- to 24- year-old group and that is easily explained by the fact that it was illegal for them to play when the lottery was launched seven years ago.

Camelot is also keen to make participation in any or all of the lottery products as easy and widely accessible as possible. The lottery, after all, sells more than 100 million items a week. The online system has yet to be designed that can cope with that sort of demand.

And sources also point to the fact that the ticket price is £1 - and again, e-commerce systems haven't been refined to the point where small ticket transactions are viable. So, it might be softly softly but they're going at exactly the right pace - and they're getting there.

Plausible? Some observers in the advertising industry remain sceptical.

They say that Camelot is still guilty of failing to face up to some of the problems. Some say that the figures it produces are misleading - the bulk of its revenue, they argue, still comes from those who can least afford to play. And they're the group least likely to have access to the internet or interactive television.

On the other hand, you could spin that as an opportunity. There is therefore a huge potential for growth in this sector - and what better way to target them than by using digital marketing techniques?

But others argue that this is a forlorn hope. Because when you start looking closely at this market, the more it looks like Camelot has missed the bus. All sorts of people are already contesting the online gambling market, from the established bookies at one end of the market to the pure-play online casinos at the other. Some of the players at this end of the market are undoubtedly fly by night but others are hugely powerful, backed by high-rolling Las Vegas operators.

"The online gambling area is already quite cluttered," Nick Suckley, the managing director of Media.Com, MediaCom's digital media unit, points out. "So it very much depends on what they're trying to achieve. Are they looking to pick up a bit of incremental revenue or are they looking to migrate more of their business online. The big issue that the lottery faces is that there was huge interest when it launched and then the novelty wore off and then it started running into negative issues. People queried the causes the money was going to and it also started to sink in just how hugely the odds were stacked against them in terms of winning anything."

In other words, is the Lotto about to start dabbling in matters it doesn't really understand? Perhaps, Suckley says. But maybe it has to take that gamble anyway.

"In the online world it's easier to innovate and it's much cheaper to do it - as the people there keep showing us. The general issue Camelot faces is that it has to keep innovating or it really does face a losing battle."

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