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She explains: "International experience shows us that those few lotteries that have grown long-term sales are those which innovate, rapidly expanding and refreshing their games portfolio to keep customers engaged."

Thompson was speaking with Richard Hurd-Wood, Camelot's director of interactive, at the Revolution Forum 2003, as part of the opening plenary session.

The event took place on the 10-12 November at The Oxford Belfry and plenary sessions were a new addition. The second plenary session saw IAB chairman Richard Eyre discuss his first impressions of the online industry after six months in his role.

Thompson also explains that National Lottery sales for July-September 2003 totalled £1.1 billion, matching the previous quarters of 2003, with weekly sales averaging £85 million. New games include Daily Play, launched in October 2003, and Euro Millions, a European lotto, to launch in spring 2004. This will see The National Lottery join up with the French and Spanish lotteries to launch a common game with a shared prize pool.

Interactive development started in January 2002 when Camelot won its second licence to run the lottery and shareholders committed £45m to developing interactive strategies. This involved building a secure web site (www.national-lottery.co. uk) that would be able to cope with high levels of traffic.

"We worked with our regulator, the National Lottery Commission, and various gambling organisations to develop policies and safeguards against fraudulent, excessive and under-age play," explains Thompson. The first web service was Instant Win Games. "We wanted to bed down our systems before offering our main draw-based games on the web," she adds.

Lotto will go online at the end of 2003 and other draw-based games in 2004. Hurd-Wood says it should launch on Sky Interactive in the first and mobile in the third quarter of 2004. However, he adds: "We are still defining mobile strategy. We have major concerns over security, and still have to register and authenticate people to ensure they are over 16." He says: "By 2009, we'll look to do eight per cent of our sales online."

Thompson suggests the facility to buy online will make the lottery "the ultimate product of convenience" for consumers. As shopping patterns evolve, The National Lottery needs to keep pace with those changes, she adds.

"Interactive platforms offer The National Lottery a great opportunity to generate significant revenue through digital channels over the course of this licence, by widening access to the lottery through opening up new and emerging channels."

The online lottery will inform players of winnings, and allow them to set up roll-over alerts and reminders to play. Thompson cites research by the Henley Centre predicting that 90 per cent of adults will be interacting via mobile, iTV and the web by 2010. "That's a pretty big number and provides a great opportunity for generating additional sales," Thompson points out.

Competitive advantage is another vital benefit. "We have to compete with a range of other products for the discretionary pound in people's pockets.

This is particularly applicable for the interactive market where betting and gaming organisations are competing for players over an increasing range of channels," says Thompson. "With the expected deregulation of the gambling market, which will be particularly felt by online, we will need to continue to provide innovative and exciting new products to enable us to compete."

Hurd-Wood is candid about the pros and cons of taking an offline brand online: the risks centre on reputation and player confidence, underage and excessive play, security and sales, and existing revenues and channels (reassuring retailers that online is beneficial to them). The opportunities are to target a fresh audience, build excitement, create new channels, challenge competitors and drive incremental revenue.

Regarding e-authentication, players must be over 16 with a UK debit card and UK address. "It is costly, but we felt it was critical to put these levels of protection in place," he adds.

Revenue will be mainly incremental, says Thompson, as digital channels will target lapsed, new and infrequent players. "Demographically, we are light on 16 to 24-year-olds and the ABs," she says. "Our interactive services will be attractive to these potential players."

Thompson thinks moving into interactive is important for the long-term health of any major brand. "Although The National Lottery has high brand awareness, our profile among online users has been low. It is encouraging that, even though we have only been advertising National Lottery products online for nine months, our brand profile has already increased," she adds.