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Tuesday, 19 December, 2000, 19:54 GMT
Camelot wins Lottery licence
Lottery ticket
The bidding process has courted controversy
Camelot has won the new seven-year licence to run the National Lottery.

The Lottery Commission's five members voted 4-1 in favour of the existing operator over the rival bid by Sir Richard Branson's People's Lottery.

In their final statement, the commissioners highlighted the uncertainty in achievable sales and greater risks in terms of financial soundness and costs in the People's Lottery bid.

But one commissioner, Hilary Blume, tendered her resignation in protest at the decision.

Lord Burns, who chaired the commission, had been asked to take a fresh view of the bidding process after Camelot fought a High Court battle claiming its bid had not been fairly treated.

Sir Richard Branson
Sir Richard Branson: 'Sad, disappointed and baffled'
Sir Richard said he was "extremely disappointed" and "baffled" by the decision.

He said he would consider overnight whether to mount a legal challenge against the decision, but hinted that he would not.

Sir Richard maintained that the presence of the People's Lottery bid had forced Camelot to improve the good causes aspect of their bid.

"If we hadn't bid, Camelot would have had it to themselves - they would have taken a great deal more money for their shareholders."

And he criticised both the government and Lord Burns.

"This government was elected on the basis that they would create a lottery in which all the profits went to the good causes. It was an election pledge and it's not being honoured," he said.

Hilary Blume
Commissioner Hilary Blume resigned in protest after voting against Camelot
"It's sad I think to see that one civil servant (Lord Burns) can be appointed to a commission and change things round so dramatically without speaking to us, without ever answering my phone calls.

"When he took this job he said that any time we wanted to call him. He's never returned our calls, he's never had a face to face to question our bid."

Track record

Camelot chief executive Dianne Thompson defended the company's track record and said "exciting" elements in the bid and a solution to "the GTech problem" had helped in its success.

"There is an awful lot of work to be done," she said. "We are confident we can achieve the increase in sales we have said."

She added that in the event of potential legal action, she hoped a speedy resolution would be reached for the sake of all parties.

Culture Secretary Chris Smith said he was grateful to the National Lottery Commission for the work they had done in difficult circumstances.

"I'm pleased they have now reached a decision and welcome their expectation that there will be a smooth transition to the next licence period.

"I note with approval Camelot's previously announced intention to reduce their profit levels under the next licence."

Lord Terry Burns
Lord Burns: Commision was criticised by Sir Richard Branson for "superficial" decision
After tendering her resignation to Culture Secretary Chris Smith, Ms Blume said: "I could not agree with the decision to award the licence to run the Lottery to Camelot. I believe the Lottery needs a relaunch to arrest declining sales."

She maintained that the bid by Sir Richard's consortium had had a better "game plan and marketing".

"The People's Lottery bid was more generous to the National Lottery Distribution Fund.

"Assuming that they could achieve equivalent sales to those of Camelot, more would flow to good causes," she said.

Ms Blume added that the People's Lottery bid had been backed by better technology, and criticised Camelot's reliance on GTech.

The handling of the tender process has been fiercely criticised ever since the Commission originally announced it would negotiate only with the People's Lottery and not with Camelot, a decision successfully challenged in the High Court.

Former chair of the commission Dame Helena Shovelton resigned after saying media coverage amounted to a personal vilification.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Nick Higham
"This extraordinary saga may not be over yet"
Sir Richard Branson, People's Lottery
"The only postive thing is that Camelot have had to sharpen their pencil"
Dianne Thompson, chief executive of Camelot
"It was a combination of our track record and the exciting things in our bid"

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19 Dec 00 | UK Politics
19 Dec 00 | Business
24 Aug 00 | UK Politics
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