Camelot this morning announced that “more in sorrow than anger” it will apply for a judicial review of the Gambling Commission's decision to grant a licence to the Health Lottery.
And it has warned that if the judicial review does not succeed, it will seek a politcal solution to the competition created by the Health Lottery's licence.
The operator of the National Lottery said that its concern is not the Health Lottery itself, but rather the precedent set by the Gambling Commission to allow the lottery – a combination of 51 society lotteries working with an external lottery manager (ELM) – to continue to operate. This lottery structure, Camelot said, is “absurd”, and that in effect the Health Lottery was set up to operate as a national lottery.
Given that at present the Health Lottery is sold through around a quarter more retail outlets than the National Lottery, Dianne Thompson, group chief executive of Camelot, asked: “So who is the national lottery?” She noted that the Health Lottery is advertised, branded and tickets sold nationally.
“And if the Health Lottery is a national lottery, then policymakers and regulators need to ask themselves how this squares with the National Lottery Act 1993 which allows for just one national lottery.”
Legislation mandates that the operator of the National Lottery is subject to a set of conditions which are not applied generally to operators of the other kind of lottery allowed, society lotteries.
National Lottery 'could lose out to copycats'
Thompson said it is her concern that allowing the Health Lottery to operate in its present form would encourage other operators into the market. She tossed up a scenario in which the National Lottery could be losing a third of its income to rival, quasi-national lotteries, in three years. And she envisaged a time where companies such as supermarket giants see profit in operating a network of society lotteries, and would cease to sell National Lottery tickets – from which a greater minimum proportion of sales must go to charity.
“There is nothing to stop anyone entering the market,” she said. “We shouldn’t have this sort of competition.”
“We believe that the Gambling Commission was quite simply wrong to licence the Health Lottery in the first place,” argued Thompson, adding that the regulator’s decision not to take action after the licence was granted has “compounded” its wrongdoing.
There has been “clear regulatory failure by the Gambling Commission on this very important issue”, said Thompson.
‘Down to Camelot to take up the fight’
Speaking at a press conference at Camelot’s offices, just a block away from where the Health Lottery held its own press conference in January, Thompson said: “This is not a press briefing I ever wanted to call. But events have forced my hand.
“I should not be the one having to do this. Camelot is simply the custodian of the National Lottery,” said Thompson. “But it seems that in the absence of thorough regulation or clear political action it is down to Camelot to take up the fight.”
A spokesman for Camelot told civilsociety.co.uk that the government is being kept aware of the company's actions with regard to the Gambling Commission.
If the judicial review is granted, and finds against Camelot, Thompson said the company will move swiftly to get Parliament to close the loophole which has been exploited by the Health Lottery.
Gambling Commission position
The announcement to apply for judicial review comes after the Gambling Commission wrote a letter to Camelot last week dismissing the operator’s concerns about Health Lottery and defending its decision to permit the newcomer a licence.
The Commission also said that the National Lottery was too late in applying for judicial review – an argument which Camelot disputes. Camelot’s legal representative, present at this morning’s briefing, said that the application advice note was only made public in August – before the lottery’s launch in October – and that it took a Freedom of Information Act request for the Gambling Commission to release details of the licensing decision in November.
Camelot intends to apply for judicial review next week. Should the review be granted, a decision which could take some time to reach, it is expected to be a further number months before a decision is reached. Thompson predicted that the exercise should cost "less than seven-figures", but that legal action would be funded by shareholders, not taken from National Lottery revenue.
