Lottery wars

An ongoing dispute between National Lottery operator Camelot and The Health Lottery has escalated with the announcement that Camelot is issuing judicial review proceedings against the Gambling Commission for “its continuing failure to take appropriate regulatory action”. The Health Lottery is operated by Richard Desmond’s Northern & Shell, owner of the Daily Express, which also owns Channel 5. It is a single umbrella brand that represents 51 ‘society’ lotteries raising sums for specific causes. Launched in September last year, it has been heavily criticised in the voluntary sector for giving only 20p in each £1 to its good causes, while the National Lottery donates 28p in every £1 and pays 12p a ticket in tax, a tax from which the Health Lottery is exempt. Dianne Thompson, Camelot’s Group Chief Executive, said: “… society lotteries are only supposed to operate on a local, rather than national, basis… we believe that The Health Lottery is in clear breach of this crucial market separation envisaged by Parliament.” She describes the Gambling Commission as being in real danger of “setting a perilous precedent that will allow other commercial operators to establish what would effectively be further rivals to The National Lottery. This would have a potentially devastating effect on returns to National Lottery Good Causes and Lottery Duty revenues to the Exchequer.”

Although the Health Lottery claims that its ticket sales have grown the market rather than diverted ticket-buyers from the National Lottery, Camelot claims that it is losing £1m a week to its new competitor and fears that if the Health Lottery is allowed to continue, other lotteries will spring up and further damage its position. Describing The Health Lottery as an “unlawful and a blatant example of an attempt to commercialise a society lottery on an industrial scale in a way that cuts across both the spirit and letter of statute and regulation”, it first raised its concerns with the Gambling Commission in October last year, asking it to intervene; but the Commission has now set out its view that The Health Lottery is not unlawful, a view which Camelot will now contest in court.News of Camelot’s challenge to the Gambling Commission comes just days after its regulator, the National Lottery Commission (NLC), agreed to extend its licence to operate The National Lottery by four years to 2023, to enable it to invest in an expansion of the number of National Lottery outlets by 8,000, primarily in rural areas and Post Offices. Camelot estimates that this will enable it to deliver some £1.2bn in additional Lottery funding for the National Lottery Good Causes by 2023. The NLC’s decision follows all-time high Lottery ticket sales in 2010/11, followed by record first half-year sales, returns to National Lottery Good Causes and prize payouts in the first six months of the current financial year.