The abolition of betting duty has slowed the long-term decline in the football pools business, gaming firm Sportech has revealed.

Sportech, which claims 95% of UK pools trade, admitted that the market slumped by 16% in the year to the end of June.

But the firm said the market had shrunk by 18% the year before, crediting the scrapping of betting duty in April for the slowdown the rate of decline.

Sportech, which owns both Zetters and Littlewoods brands, said it was still poised to reap profits from the unit despite the diminishing numbers of pools punters.

Directors believe that, thanks to cost efficiencies, operating profitability can be maintained "despite the continuing decline in turnover", a statement on Monday said.

The comments came as Sportech posted a pre-tax profit of �5.6m for the first six months of the year, compared with a profit of �3.9m in the same period in 2001.

New betting tools

Sportech, formerly a technology licensing firm named Rodime, bought the Littlewoods pools business in June 2000, so beginning a transformation into a sports betting firm.

Littlewoods had seen its 75-year-old pools unit by a new generation of gaming products including the National Lottery.

Sportech said it was itself diversifying into providing betting services on a range of sports and through platforms such as interactive television.

In March, the company secured exclusive rights to interactive betting across all ITV's channels.

Partnership setback

Sportech said its strategy was now "to provide customers with a wide range of betting opportunities across the television, telephone and internet channels".

In the six months to 30 June, income from to Sportech's telephone and internet operations leapt by 69% to �39.9m and the company said the average stake of bets placed had risen by almost 25%.

However, the company said it was still not making profits from this division and one of its partnerships, a deal with the Attheraces horse-racing channel, had been put back to the end of the year because of technical hitches at the channel.

But the company said it hoped to deliver a "step change in interactive performance in 2003", with the launch of its gaming offering on ITV channels at the beginning of next year.

Costly punt

Sportech also launched a Littlewoods online casino last month and said it was working with retailers to sell Littlewoods-branded scratchcards.

In total Sportech spent �3.3m on new betting platforms in the first six months of the year.

It bought Zetters last month for �1.35m.

In the City, Sportech shares closed 0.5p higher at 11.25p on Monday.