A RIVAL to the National Lottery that promised to allow punters to choose which cause would get 30p in every £1 ticket admitted yesterday that it was in financial trouble after just four weeks in operation.
Sales at Monday, the National Lottery’s first major competitor, were said to be “significantly less than projected”. Chariot, the company behind Monday, said that it would have to raise more money to ensure the weekly lottery’s survival.
The lottery had promised players a better chance of winning than its long-established rival, but has already turned into a major money loser for blue-chip investors, including Rathbone and Fidelity.
Shares in Chariot crashed 63 per cent to 8p yesterday. It was floated in February at 115p, and the stock briefly surpassed 210p in April, as hype about the prospects for the company reached fever pitch.
However, it offered a maximum prize of only £1 million, the most allowed for any lottery other than the National Lottery itself. The size of prizes is considered by experts as central to a lottery’s chances of success.
The jobs of chairman Tim Holley, a former National Lottery chief executive, and Craig Freeman, chief executive, are also at risk, as Chariot now has to go cap in hand to its investors as it tries to raise vital funds at 5p a share.
Significantly, neither was named as a contact after yesterday’s shock announcement. Instead, inquiries were referred to Peter Jones, chairman of the Tote, who acts as Chariot’s deputy chairman. It is thought that the fate of the company’s leaders now lies in the hands of its shareholders.
Chariot raised nearly £15 million both before and as part of the float, but this sum of money is thought to be close to exhaustion after a major marketing campaign flopped. Future marketing budgets will have to be slashed if the lottery is to reach weekly break even.
The new lottery, which operated online, also suffered major problems in its first week, after a late surge of interest from players sent its website into meltdown. Chariot had predicted that it would raise £3.3 million for charity, but only £150,000 was actually raised then. Since then the weekly total has dropped further. In every £1 ticket, 30p was available to five charities each week. The company said that it had raised £520,000 so far, implying that it was raising about only £120,000 in the three weeks following.
The new lottery believed it could capitalise on dissatisfaction with the National Lottery by ensuring that a jackpot would be awarded every week, and by allowing players to influence the charities supported.
HOW THE LOTTERIES ADD UP
National Lottery (Camelot)
Weekly takings: £85 million to £90 million
Prize pool: £42.5 million to £45 million
Good causes: £23 million to £25 million a week
Breakdown: prizes 50%, good causes 28%, operating costs 22%
Monday (Chariot)
Weekly takings: £433,000
Prize pool: £238,000 a week
Good causes: £130,000 a week
Breakdown: prizes 55%, charities 30%, operating costs 15%
