If they start to sell fixed-odds betting through their 35,000 outlets this is going to have a major impact on our business

Warwick Bartlett, Betting Office Association

Camelot believes changes are needed if the amount of money the UK's national Lotto game draw makes for good causes is to go on rising.

Chief executive Dianne Thompson has spoken to culture secretary Tessa Jowell about the need to learn from what other European national lotteries are doing, a Camelot spokeswoman told BBC News Online.

But the Betting Office Association told the BBC it would be seeking talks with the government to express its concerns over any possible expansion of Camelot's activities.

'Mature market'

"Lotto has reached its maturity in the market place at the moment," the Camelot spokeswoman told BBC News Online.

Ticket sales have been falling over the past four years

"It is becoming increasingly clear that it is almost impossible for the national lottery to grow without moving into new areas, like games of skill, sports betting and rapid-draw Keno," the Sunday Times quoted Ms Thompson as saying.

Keno is a game played on video machines in pubs.

She reportedly said this would need "a change of heart from government". The lottery's activities are restricted under the terms of its licence.

Camelot's spokeswoman denied that Ms Thompson had written a letter to the Culture Secretary containing the comments quoted by the Sunday Times.

She said Camelot was pursuing permission to take part in a Europe-wide lottery.

However any move into sports betting was for the "long, long, long term future," the firm's spokeswoman said.

'Unfair' competition

The chairman of the Betting Office Association, Warwick Bartlett, said his members were worried about Camelot's intentions.

"We're significantly worried to the extent that we'll be making a representation to the minister about it," he told BBC Radio 4's Today programme.

"From our point of view it's unfair because they have a monopoly and we can't bet on the outcome of their own lottery... we have to bet on the outcome of the Irish lottery," he added.

"If they start to sell fixed-odds betting through their 35,000 outlets this is going to have a major impact on our business."

Sagging sales

Camelot has been exploring several ways to counter declining ticket sales, which have dropped in value by �500m over a four year period.

Camelot gave the lottery a �28m makeover in May, shortening its name to Lotto and redesigning the famous crossed fingers logo to look more cheerful.

A �3m advertising campaign aimed to increase public awareness of the charitable contributions made by the lottery.

Daily prizes?

In September, Camelot said it was "looking closely" at the possibility of holding a daily prize draw, a proposal which would need the approval of the National Lottery Commission.

The firm has pledged to cut its costs by 10% in response to falling ticket sales.

Camelot won the licence to run the UK national lottery for a second seven-year term - till 2009 - after a bitter battle with a rival operator backed by Virgin tycoon Richard Branson.

As a condition of the new licence, Camelot had to install 25,000 new lottery terminals and reduce the proportion of lottery money it can take in profit to less than 0.5%.