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Chariot's on fire as Monday lottery teeters

Fundraising | 1 Oct 2006

Ticket sales in the beleaguered Monday charity lottery are not high enough for its operator Chariot to break even, and the company has admitted it may have to call in administrators.

Since its launch in May, Monday has raised more than £1.5m in unrestricted income for charities.  But Chariot's share price has dropped from the 115p offer price in February to just 66p.

Stuart Handley, communications director at Chariot, said: "Bringing in administrators would be the final option. Chariot is still solvent as a business, it's just that sales aren't what we expected. We will need to make a decision about the long-term future of the lottery soon, although I could not put a timescale on that at this time."

The Chariot board has been looking at other ways to increase ticket sales and has also been trying, thus far unsuccessfully, to find a buyer for the company or raise further investment.

The Monday lottery has been dogged by problems since its launch.  Its advertising campaign was panned by critics who said it failed to clearly explain the lottery's function; its website crashed on the opening night of ticket sales, and eventually it had to cut staff in a bid to save funds.

But charities remain supportive.  John Low, chief executive at RNID which has so far received £30,000 from the lottery, said:  "I would be terribly disappointed if it had to bring in the administrators. It had so much potential - people love playing these kinds of games and it's so hard to create a way of raising unrestricted funds. I am being cheeky but I hope someone like Richard Branson could come along and invest some of his entrepreneurial flair and really make a go of it." Low blames some of its failure on the massive burn rate at the launch. He added: "The burn rate was too high at the beginning and they didn't have enough to sustain them through the growth period."

Tom Marshall, senior corporate partnerships executive at the British Red Cross, said: "We are very disappointed to have received confirmation from Chariot that Monday's weekly sales are still running below a level required for Chariot to operate at breakeven.  We have been and remain in discussion with Chariot throughout this difficult period, and remain supportive of a concept that helps to generate vital, unrestricted funds for charities."

In a closing statement on its website, the Chariot board said: "The board intend to continue to operate the Monday lottery and wishes to reassure all its players and registered users that all monies lodged in electronic wallets and pledged to play in future lotteries remain held in trust and thus remain the property of those individuals."

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Directory: British Red Cross | Royal National Institute for Deaf People (RNID)
Who's Who: John Low