1. A Lottery for the future Robert Foster – National Lottery Commission Mark Harris – National Lottery Commission Ben Davey – NM Rothschild

2. 22 June 2005City briefing

3. 22 June 2005City briefing Over £17 billion to good causes…

4. 22 June 2005City briefing Over £24 billion in prizes …

5. 22 June 2005City briefing Part of our everyday life…

6. 22 June 2005City briefing Purpose We are here to:  Make contact  Provide you with information  Encourage feedback on the competition process

7. The Lottery Environment

8. 22 June 2005City briefing The Lottery Environment What does the Commission do? Selects and licences the operator Licences the games Monitors and reports on operator performance Enforces the licence But does not: Handle applications for Lottery funds Distribute any Lottery money

9. 22 June 2005City briefing The Lottery Environment The Commission is committed to a fair and effective competition. Our objectives are to design a process that:  Generates competition for the licence  Establishes a level playing field for all bidders  Treats all players fairly  Maximises returns to good causes

10. 22 June 2005City briefing The Lottery Environment We have a strong structure in place to deliver the competition.  Project Board  Permanent Chairman of the Project Board  Independent assurance  External review  Commissioners make the final decision

11. 22 June 2005City briefing The Lottery Environment Lead / Financial / Commercial - Rothschild Technology / IT-HEDRA Economics-NERA Legal-Freshfields Assurance-Cornwell We have appointed advisers to support the process:

12. 22 June 2005City briefing The Lottery Environment We are looking for an operator that delivers a high level of funding for good causes by offering :  Games that are attractive to a wide cross-section of the public  Innovative games and services  A reputation for being highly competent and with high integrity

13. The Lottery Opportunity

14. 22 June 2005City briefing The Lottery Opportunity What does the Lottery operator do? Develops games Creates and executes marketing strategy Manages the retail estate and other distribution channels Organises draws Pays large prizes to winners Takes legal action to protect intellectual property Provides customer service / care

15. 22 June 2005City briefing The Lottery Opportunity Retail is currently the key distribution channel, accounting for 97% of sales. Emerging channels are: Internet Interactive television Text messaging on mobile phones

16. 22 June 2005City briefing The Lottery Opportunity Sales – total £4,615m (FY 2003/2004, £m) Source: NLC discussion document

17. 22 June 2005City briefing Overall sales and proceeds for good causes Total sales and NLDF primary contribution (£bn) £4.8bn £1.2bn

18. 22 June 2005City briefing Overall sales Total sales 2002 – 2005 (£bn)

19. 22 June 2005City briefing The Lottery Opportunity Camelot P&L 2003/2004 (£m) Source: Camelot annual report 2004

20. 22 June 2005City briefing The Lottery Opportunity Profitability of Camelot (£m) Source: Camelot annual reports

21. 22 June 2005City briefing The Lottery Opportunity Key attractions: Stability of revenue stream Scope for innovation  Technology  Routes to market  Game portfolio  Financing  Others?

22. 22 June 2005City briefing The Lottery Opportunity Regulatory environment There is room to innovate, but some activities are out of bounds:  Sports betting  Rapid draws  Games of skill  Bingo  Sales through street vendors and certain licensed premises (such as bookmakers)

23. 22 June 2005City briefing The Lottery Opportunity Branding / marketing Technology Communications network Financing Gaming / leisure Distribution THE OPPORTUNIT Y

24. The Lottery Process

25. 22 June 2005City briefing The Lottery Process We published a discussion document in January. Key issues for discussion:  Levelling the playing field  Reducing costs for bidders  Aligning incentives

26. 22 June 2005City briefing The Lottery Process Provisional timetable: Statement of Main PrinciplesAutumn 2005 Draft Invitation to ApplySpring 2006 Final Invitation to ApplyLate Summer 2006 Select preferred bidderEarly Autumn 2007 Commencement of new licence1 February 2009

27. 22 June 2005City briefing The Lottery Process How you can become part of the process: Consider the issues outlined here Consider the opportunities for your clients Open a dialogue with them and us We are happy to conduct face-to-face meetings to discuss the issues

28. And now it’s your turn… Questions