August 7, 2007 / 9:22 AM / 12 years ago

Camelot wins lottery licence rollover

LONDON (Reuters) - Camelot retained the licence to operate the National Lottery on Tuesday, beating India’s Sugal & Damani to be named as the preferred operator for 2009 to 2019.

A lotto draw machine is seen in operation in this undated handout photo. Camelot was selected to continue operating National Lottery on Tuesday after it won a two-horse race to become the preferred bidder. REUTERS/Handout

Camelot, owned by Royal Mail, De La Rue, Cadbury Schweppes, Thales and Japan’s Fujitsu, has run Britain’s lottery since its inception in 1994. The National Lottery Commission, which announced the decision, said Camelot would be, “better able to maximise returns to good causes,” after it said it expected to raise around 22 billion pounds for good causes over the 10-year contract, 4 million more than Mumbai-based Sugal & Damani had predicted.

Sugal & Damani, whose businesses range from diamonds to tourism and Indian lotteries, made the only rival bid.

The Commission said it chose the firm it thought would make the most money for good causes. “We looked at all the marketing plans, game plans and business plans and come out with which of these bidders is more likely to generate higher sales and therefore higher returns,” Chair of National Lottery Commission, Anne Wright said.

“In terms of generosity (the percentage of each pound spent on tickets going to good causes) Camelot were also proposing slightly more generous contribution,” she added.

GLOBAL LOTTERY

Camelot captured headlines earlier in the year after it said its plans included a new global lottery with a once-a-month, 20 million pound jackpot and a once-a-year global draw that could see winners scoop jackpots of more than 100 million pounds.

It also plans to launch multiplayer games, more online games, new types of games such as Sudoku, and new kinds of prizes such as all-expense-paid luxury trips, tickets to sports events and music gigs and chances to meet celebrities.

Camelot said it expected total sales of 79 billion pounds over the 10-year period while Sugal & Damani predicted sales of 63.9 billion pounds. The Commission said there was “significant probability” that firms were too optimistic in their forecasts.

Camelot had lottery sales of 4.91 billion pounds in the year to end-March, with almost 1.25 billion pounds going to charities and other causes. At its peak it had sales of around 5 billion pounds but saw interest fade after the initial novelty wore off.

Averaged out over the current seven-year licence period, of every pound spent on the National Lottery, half is paid out in prizes, 28 pence is given to causes, 12 pence goes to the government in lottery duty and 5 pence covers retailers’ commission.

Camelot takes 4.5 pence in operating costs and its shareholders get the final halfpenny.

Italy’s Lottomatica said it had won the deal to provide the new technology for the contract which will see Camelot replace around 27,000 lottery terminals in shops and garages with touch-screen versions.

Camelot has signed a deal with Ticketmaster, part of IAC/InterActiveCorp, the world’s largest provider of tickets for sports, music and theatre, to sell tickets through the new terminals.

It will also bring in Endemol, the producer of TV show Big Brother, to help it revamp lottery draws and develop interactive content.

Additional reporting by Jonathan Cable

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