Regulator - Please Make a Bid for Lottery
01 Oct 2006
The National Lottery regulator is trying to drum up interest from potential bidders for the next licence amid fears that no serious rival to Camelot will emerge.
Investment bank NM Rothschild, which acts for the National Lottery Commission, has contacted various parties after last week's decision by Australian lottery operator Tattersall's to drop out of the race for the next UK lottery licence.
This leaves just two bidders - Camelot, which has run the lottery since its launch 12 years ago, and little-known Indian lottery operator Sugal & Damani.
The commission has always said it favours a small number of high quality bidders for the next licence. But a failure to attract more than two, including the present operator, for what former bidder Sir Richard Branson has described as the 'biggest Government monopoly contract in the UK', would be highly embarrassing for the Government.
Rothschild is even understood to have contacted Branson's People's Lottery group, which won the previous competition six years ago before that decision was overturned in a judicial review.
Branson had already made it clear that he would not bid because he regarded the selection process as biased towards Camelot. He also wanted the focus to be on which organisation would raise most for good causes.
He is not thought likely to re-enter the bidding, with or without partners, under the present structure.
Tattersall's decision to pull out came after its merger with fellow gaming group Unitab and doubts over its chances of success in the UK.
The Australians are understood to regard Camelot as an exceptionally strong operator with intimate knowledge of the UK market, making it very different from others in which they operate.
They were put off by rules that mean if a successful bidder fails to have its systems ready on day one of the new licence, it could be fined the equivalent of its first year's profits.
Tattersall's is understood to have had tentative talks with Branson about joining forces for a bid before Branson's withdrawal. Bids for the next lottery licence must be in by January 26 next year after the commission moved the original October deadline back for the third time.
The move infuriated Camelot, which said its views had not been taken into account. Camelot claims that the delay affects its operations as it must focus for longer on the bid and sales have been shown to suffer where this is the case.