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Lottery Commission rejects Camelot top-up plans

Mobile News
July 16, 2010

The National Lottery Commission (NLC) has provisionally rejected UK lottery operator Camelot’s proposals to offer ancillary services, including mobile top-ups, through its network of terminals

NLC said it had opted to refuse consent on the grounds of EU and competition law issues raised. It added that “other issues” were also a factor in its decision, although it has not finished considering these issues as it has preliminarily refused consent on EU and competition law grounds.

The preliminary, or ‘minded to’, decision gives interested parties, namely Camelot, Payzone, PayPoint and epay, until September 3 to submit written responses.

Mobile top-ups are part of a wider commercial services proposal made by Camelot alongside sales of international calling cards, bill payments, electronic fund transfers and ‘Tap & Wave’, payments made using contactless technology.

Camelot said its proposal would deliver choice and convenience for customers as 96 per cent of the UK adult population live or work within two miles of a National Lottery outlet, as well as better terms and choice for retailers and additional funds for the National Lottery Good Causes fund through a new revenue stream.

However, NLC said the contribution to Good Causes offered by ancillary services would amount to a small percentage of the total raised by Camelot’s core activities, which raise £1.6 billion annually, and could take up to two years to trickle through due to “the likely litigation in relation to any grant of consent”.

Moreover, NLC noted the reputation of the National Lottery could be at risk in the event of a successful challenge to any decision, and said the additional costs attributable to its decision, such as undertaking deeper research into the likelihood of breaching EU and competition law and defending any legal challenge were prohibitive. It also said any financial expenses incurred would be met by a reduction in sum available for good causes.

In a statement in response to NLC’s decision, Camelot said: “We firmly believe that NLC’s preliminary position is flawed and remain absolutely confident that our proposals do not breach either European or competition law.

“We are disappointed that NLC has failed to reach a definitive decision – instead choosing to further extend the process, which will delay the generation of additional funds for Good Causes, and benefits for retailers and consumers. We remain convinced that our detailed and carefully-considered plans, based on thorough and robust legal advice, should allow us to offer commercial services through National Lottery retailers.”

Rival PayPoint welcomed NLC’s decision, and saw its share price rise by more than 25 per cent as the market responded positively to the decision after concerns about large-scale competition.

Chief executive Dominic Taylor said: “This is a victory for local shops, including sub-post offices, whose earnings and footfall would be undermined by this proposal. Today’s decision should protect vulnerable people from the increased temptation to gamble.

“It would be entirely wrong if Camelot were to be allowed to exploit its monopoly position, and we are pleased that NLC has accepted the compelling arguments that the proposal would have distorted competition in the bill payments sector.”

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