Camelot Makes Lottery Bid Threat Over Health Lottery Competition

Camelot would consider not bidding to renew its licence to operate the UK's National Lottery if it continues to face competition from the rival Health Lottery, according to its chief executive.

Dianne Thompson said this week that Richard Desmond's Health Lottery undermined the entire monopoly model that the National Lottery was based on and that she felt "frustrated" Camelot had to defend it alone.
 
So could Camelot decide not to bid again for a licence it has held for 19 years?
 
"Possibly yes," Thompson told GamblingCompliance during a break at the European Lotteries Congress in Tel Aviv.
 
The lottery is based on a "risk-reward model", she said. "As a monopoly there's little risk and so little reward."
 
But with the Health Lottery, which is available in 30,000 outlets, 3,000 more than the National Lottery, there is now "a lot of risk and so there needs to be more reward", she added.
 
Camelot has been the sole licence holder since the National Lottery was set up in 1994 and has a contract to run it until 2023. Profits last year were £55.2m from an all-time high of £6.9bn in sales.
 
Thompson welcomed the government's consultation on how much society lotteries, including the Health Lottery, contribute to good causes, and hoped it would prevent other companies following publishing baron Richard Desmond's lead.
 
But earlier Thompson also told delegates she felt "frustrated" that Camelot had largely been left to fight the Health Lottery on its own.
 
The company lost a judicial review on "various technicalities" last year against the Health Lottery, which Camelot still regards as an illegal competitor, she said.
 
Camelot was disappointed that its regulator, the National Lottery Commission, and the government did not help with the case. "I do believe that more people should get behind the monopoly they have created and I don't think they are doing it," she said.
 
The National Lottery has become even more important to Camelot with the failure so far to launch a lottery outside the UK.
 
Difficulties in the US, in particular when the company’s bid to operate the lottery in Pennsylvania was derailed by opposition from the state’s attorney general, have forced management to make deep job cuts in its global services team.
 
Still, Thompson said Camelot had a "good chance" of winning one of the international lottery contracts on offer. Ireland and Turkey are just two countries looking to privatise their national lottery contracts in the next 12 months.
 
Last year, sales of National Lottery products, such as tickets and scratchcards, were up 2.4 percent from March 2012 and more than £3.6bn was paid out in prizes, with £837m going to the Exchequer in lottery duty.
 
The UK government has "the whole area'' of society lotteries and the National Lottery "under review", said Jonathan Stephens, permanent secretary of the Department for Culture, Media and Sport on Tuesday at parliamentary committee hearings in London.
 
The government is also planning a consultation on whether the percentage of revenues that society lotteries are required to contribute to good causes should be changed, he said. 
 
A Health Lottery spokeswoman said: "More than £34m has been raised for communities up and down the country and through the Health Lottery, charities who have been struggling to raise money have a new lifeline of funding.”
 
She added that the Health Lottery was not an "illegal" rival to the National Lottery.
 
“Camelot took that argument to court and the court threw it out. That seems pretty decisive," she said.