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Camelot Illinois, LLC as part of an overall business strategy to assist the Lottery in growing revenue, desires to procure the capabilities and thought leadership of a research organization with lottery experience to provide customer insight.

Camelot Illinois operates the Illinois Lottery, a modern enterprise that truly benefits the people of Illinois. We place consumers and social responsibility at our core, providing funding for. Camelot UK Lotteries Limited is the legal entity which holds the licence to operate the National Lottery until January 2023. Under the terms of the licence it is a single-purpose company, dedicated to the operation of the UK National Lottery.

The Camelot Group is the operator of the UK National Lottery whose current franchise period started in 2009 and runs until 2023.^[2] It has also operated the Illinois State Lottery in the state of Illinois in the United States since 2018. The Camelot Group companies, of which Camelot UK Lotteries Limited is the UK National Lottery operating subsidiary, are ultimately owned by the holding company Premier Lotteries Investments UK Limited.^[3]

History[edit]

UK development[edit]

Camelot was formed as a consortium to bid for the National Lottery project. The major partners were International Computers Limited (ICL), supplying hardware, software, and systems integration expertise; Racal with responsibility for the communications network; and Cadbury Schweppes bringing experience in consumer marketing and knowledge of the world of corner-shop retailers. De La Rue brought knowledge of secure printing technology, and GTECH Corporation were brought in as the selected supplier of applications software. Staff were seconded from the partner companies, transferring to Camelot Group when the bid was won.^[4]

Senior executives such as Tim Holley were enticed to join the project by the promise of large bonuses if the bid was successful. This caused embarrassment later when the incoming Labour government, in particular Chris Smith, the Culture Secretary, publicly criticised Camelot and its executives for excessively lavish salaries and bonus payments.^[5]

The Camelot Group was awarded the National Lottery franchise in May 1994.^[6] It won the bid against Sir Richard Branson who proposed to create a not-for-profit structure, an idea that didn't seduce the Gambling Commission.^[7]

The Camelot name is reflected in the actual lottery machines used in the National Lottery draw, which are named for characters, places, and objects in Arthurian Legend (Guinevere, Lancelot, Excalibur, Arthur, etc.).^[8]

In 2004, the transnational lottery EuroMillions entered the UK lottery market.^[7]

Camelot's third licence period started on 31 January 2009; the money given to good causes was increased, and retailers' commission increased from 5% to 6%. The third licence is for a ten-year period with the option to extend by a further five years.^[9] In March 2009, Camelot announced a programme of redundancies to cut costs throughout the company.^[10]

In March 2012, the National Lottery Commission extended Camelot’s Licence by four years to 2023, on condition that Camelot deliver an additional £1.7 billion in lottery funding to good causes.^[11]

In October 2013, Camelot doubled the ticket price of its main National Lottery game, Lotto, to £2, with the aim of increasing ticket sales.^[12] Analysts noted that in the subsequent two-year period, funds raised for good causes by the National Lottery fell by £100 million.^[13]

In November 2017, Nigel Railton was named CEO of the Camelot group in the midst of dramatic drops in lottery ticket sales. Nigel Railton had served as CEO interim since the departure of Andy Duncan in April 2017.^[14]

For the 2019 franchise renewal bid, the Camelot group could be bidding against billionaire Richard Desmond.^[14]

International development[edit]

In March 2010, Ontario Teachers' Pension Plan from Canada announced that it was buying Camelot for £389m.^[15][16]

In October 2013, Premier Lotteries Ireland, a consortium including the Camelot Group with An Post, won the licence to run Ireland's lottery for 26 years.^[17]

In January 2018, the Camelot group became the new operator of the Illinois State Lottery in the United States. The state of Illinois was the first in the US to privatize its lottery system.^[18]

Earnings[edit]

In 2017/18, the average pound (100p) spent on the National Lottery can be expressed as having been divided as follows:^[19]

• 55p Prize fund (50p in 2005)
• 24p Good causes (28p in 2005)
• 12p Government (12p in 2005)
• 4p Retailers (5p in 2005)
• 5p Camelot (5p in 2005)
  • 4.5p Camelot for operating costs
  • 0.5p Camelot for profit^{[citation needed]}

According to the Camelot Group, the UK Lottery creates 30 millionaires every month.^[7]

Controversies[edit]

2000/2001 franchise controversy[edit]

Two companies competed for the National Lottery franchise in 2001: Camelot, the incumbent operator, and a rival operator called 'The People's Lottery', organised by Sir Richard Branson.

During the 2000 franchise bidding process, a technical problem with lottery terminals supplied by American company GTECH Corporation came to light. It was discovered that this technical problem may have inadvertently caused winners to be paid incorrect amounts. Because of this problem and the relationship between Camelot and GTECH, the National Lottery Commission recommended that the lottery franchise be awarded to the People's Lottery. GTECH had been a shareholder in Camelot Group but they sold their shareholding to the remaining shareholders,^[20] who increased their stakes from 16.66% to 20%.^[21][22]

In August 2000, the chair of the National Lottery Commission, Dame Helena Shovelton, announced that neither party would be invited to run the National Lottery, claiming that neither party met the statutory requirements to run the lottery. It was felt that legal problems were responsible for the downfall of the People's Lottery bid, while the relationship between G-Tech and Camelot was the reason Camelot would not be invited to run the lottery.

By September 2000, it was clear that although neither party met the statutory requirements to run the lottery, the Commission was going to award the franchise to the People's Lottery.^[23][22] Camelot initiated legal action, taking the Commission to the high court for a judicial review. The High Court judges sided with Camelot, describing the Commission's decision as 'conspicuously unfair'. The National Lottery Commission responded by dismissing the HM Treasury legal team who had been advising them. Dame Helena resigned shortly afterwards and was replaced by Lord Burns.^[24][22]

During November, the National Lottery Commission reopened the bidding process and both parties resubmitted their bids, the commission hoped to announce the winner by mid-December. On 19 December 2000 the commission announced that Camelot would be awarded the franchise, with voting 4-1 in favor of Camelot.^[25] One member later resigned from the commission over the process, deeply unhappy that Camelot had been re-awarded the franchise. Sir Richard Branson threatened to take further legal action; but due to the prospect of a lengthy and costly legal battle, one which could have resulted in the National Lottery games being suspended, he did not proceed with the action.^[22]

The governmental body the Gambling Commission is responsible for deciding who is awarded the franchise. The way the franchise was awarded to Camelot in 2001 caused some controversy, because state-owned Royal Mail held a 20% stake in the Camelot Group.^[26]

2009 ticket fraud[edit]

In 2009 Giles Knibbs, a Camelot employee, conspired with a member of the public, Edward Putman, to claim a jackpot prize using a bogus ticket. Knibbs, who worked in Camelot's fraud department, found a way to forge lottery tickets bearing unclaimed winning numbers. Putman, of Kings Langley in Hertfordshire, was initially prosecuted in July 2012 for benefit fraud after failing to declare lottery winnings of £2.5 million whilst in receipt of welfare benefits.^[27]

Putman refused to give Knibbs £1m they had agreed, and had him arrested after an row over their agreement. Putman charged him with criminal damage, burglary and blackmail. In October 2015 Knibbs took his own life, fearful of repercussions over his actions.^[28]

Although police did not have enough evidence to bring a prosecution against Putman at the time, the case was investigated by the Gambling Commission in December 2016, who found that Camelot had breached the terms of its operating licence in failing to investigate the veracity of the prize claim before paying out and fined Camelot £3 million.^[29] The case was subsequently investigated further and in October 2019 Putman was jailed for 9 years for defrauding the National Lottery of £2.5 million.^[28][30]

2018 failings fine[edit]

In August 2018, the Camelot Group was fined £1.15 million by the Gambling Commission because of the malfunctioning mobile app launched by the group, and for failing to publish a complete raffle prize list. Among other things, the mobile app would apply a non-winning label on a user's winning numbers. The Commission fined Camelot for five major failings, and observed 10 other failings that did not lead to further penalties. The Camelot Group accepted the fine and said it was sorry.^[31]

Footnotes[edit]

1. ^The National Lottery brand is owned by the Gambling Commission and licensed to Camelot as part of the franchise agreements under which Camelot operate The National Lottery.
2. ^The Illinois State Lottery, marketed as the Illinois Lottery, is a brand owned by the State of Illinois and marketed by Camelot on its behalf.

References[edit]

1. ^'Camelot Group Website, 'Camelot appoints Nigel Railton as UK CEO (http://www.camelotgroup.co.uk/news/camelot-appoints-nigel-railton-as-uk-ceo) (Accessed 22 September 2018)
2. ^Hancock, Alice (14 November 2019). 'UK National Lottery operator Camelot posts record first-half sales'. Financial Times. Retrieved 7 July 2020.
3. ^https://beta.companieshouse.gov.uk/company/07202475/filing-history/MzI0NjA5MDQyMGFkaXF6a2N4/document?format=pdf&download=0
4. ^Douglas, Andrew (December 2001). The National Lottery and Its Regulation: Process, Problems, and Personalities. A&C Black. p. 121. ISBN9780826455543. Retrieved 11 January 2017.
5. ^'Interview - Chris Smith'. The New Statesman. 8 November 1999. Archived from the original on 11 January 2017. Retrieved 11 January 2017.
6. ^'Breaking News, World News & Multimedia'. Retrieved 26 December 2016.
7. ^ ^abcAndrews, Mark. 'The National Lottery: It could still be you, 25 years on'. www.shropshirestar.com. Retrieved 28 May 2019.
8. ^Storry, Mike; Childs, Peter (25 November 2016). British Cultural Identities. Routledge. ISBN9781315440583. Retrieved 11 January 2017.
9. ^'Camelot wins third lottery licence'. Daily Express. 7 August 2007.
10. ^'Camelot in lottery job cuts plan'. BBC News. 13 March 2009. Retrieved 11 January 2017.
11. ^'Chairman's & Chief Executive's statements for the year ended 31 March 2015'(PDF). Camelot UK Lotteries Limited. June 2015. p. 2. Retrieved 12 January 2017.
12. ^'National Lottery Lotto ticket price doubles to £2'. BBC News. 3 October 2013. Retrieved 12 January 2017.
13. ^Farey-Jones, Daniel (22 June 2015). 'National Lottery good-cause money has fallen by £100m since the Lotto ticket price doubled'. Third Sector. Retrieved 12 January 2017.
14. ^ ^abAhmed, Murad. 'Camelot overhauls lottery as ticket sales fall'. Financial Times. Retrieved 28 May 2019.
15. ^'BBC News - National Lottery owner Camelot sold to Canada teachers'. BBC News. 25 March 2010. Archived from the original on 14 March 2016. Retrieved 11 January 2017.
16. ^Brummer, Alex (2013). Britain for Sale: British Companies in Foreign Hands - The Hidden Threat to Our Economy. Random House. p. 249. ISBN9781847940766. Retrieved 11 January 2017.
17. ^Smyth, Jamie (4 October 2013). 'Camelot and An Post picked to run Ireland's lottery'. Financial Times. Retrieved 28 May 2019.
18. ^Press, Sara Burnett, The Associated. 'Illinois Lottery's new manager projects $4B in sales'. The State Journal-Register. Retrieved 28 May 2019.
19. ^https://www.gamblingcommission.gov.uk/for-the-public/National-Lottery/About-the-National-Lottery.aspx
20. ^https://www.theguardian.com/business/2000/jan/17/3
21. ^Commons, The Committee Office, House of. 'House of Commons - Culture, Media and Sport - Minutes of Evidence'. www.publications.parliament.uk. Retrieved 11 January 2017.
22. ^ ^abcd'At a glance: Lottery saga'. BBC News. 10 January 2001. Archived from the original on 2 October 2002. Retrieved 12 January 2017.
23. ^'National Lottery: Why the bids failed'. BBC News. 23 August 2000. Archived from the original on 27 April 2006. Retrieved 11 January 2017.
24. ^'Lottery chairman resigns over 'media insults''. Daily Telegraph. 5 October 2000. Archived from the original on 27 February 2016. Retrieved 11 January 2017.
25. ^'The lottery commission's statement'. 19 December 2000. Retrieved 26 December 2016 – via The Guardian.
26. ^'The lottery's winners and losers'. BBC News. 3 November 2004. Archived from the original on 7 March 2016. Retrieved 11 January 2017.
27. ^Cockerell, Jennifer (3 July 2012). 'Lottery winner rapist Edward Putman admits fraud'. The Independent. Archived from the original on 23 October 2019. Retrieved 23 October 2019.
28. ^ ^ab'Conman jailed for £2.5m fake lottery ticket fraud'. BBC News. 4 October 2019. Archived from the original on 23 October 2019. Retrieved 23 October 2019.
29. ^Marston, Rebecca (16 December 2016). 'National Lottery firm Camelot fined for £2.5m suspect ticket win'. BBC News. Archived from the original on 17 December 2016. Retrieved 1 January 2017.
30. ^'Man convicted over £2.5m National Lottery fake ticket fraud'. The Guardian. 4 October 2019. Archived from the original on 5 October 2019. Retrieved 24 October 2019.
31. ^McCormick, Myles (23 August 2018). 'UK National Lottery operator Camelot fined £1.15m by regulator'. Financial Times. Retrieved 28 May 2019.

External links[edit]

So far, the only concrete change to come out of the much-hyped forthcoming overhaul of British gambling laws is the raising of the age at which players can play the National Lottery from 16 to 18.

But rather than being a blow to incumbent Camelot and its competitors in the race for the fourth National Lottery tender, and unlike some of the decisions expected to result from the review, the news probably came as a relief.

Particularly over the past year or so, Camelot has repeatedly come under fire for, to quote an investigation published in The Sunday Times in July, “exploiting a loophole that allows children to gamble hundreds of pounds a week online”.

The newspaper suggested that some of Camelot’s games appeared to target children, and said: “The normal minimum age for gambling is 18, leaving lotteries like Camelot, which runs the lottery, having exclusive access to a teenage market denied to other betting firms.”

Various other anti-gambling campaigners and newspapers jumped on board the anti-Camelot bandwagon, with a number of headlines claiming it allowed children to gamble up to £350 a week.

Technically speaking this may be true, as the weekly deposit limit of £350 applies to players of all ages.

An exaggerated issue?

But the reality of spending habits for players under 18 is rather different, says Richard Hickson, Camelot’s head of policy and public affairs.

“The weekly deposit limit for the National Lottery website is £350 a week. However, the average weekly spend for this age group is under £5.

“And, to put it into context, out of more than 8.5m active registered online National Lottery players, only around 3,300 of them are currently aged 16 and 17.”

With such modest revenues from the players in question, it seems likely the bad PR would have far outweighed the financial rewards for Camelot and it repeatedly said when asked beforehand that it didn’t oppose the age being raised.

Shortly after the announcement, a Camelot spokesperson pointed out: “We’ve said all along that we would fully support any decision made by the government to raise the minimum age to play.”

In anyone was dragging its feet, it was perhaps the government and indeed, Hickson says Camelot was not in a position to make the decision itself.

“We would have been unable to unilaterally change the law or our current operating licence, which requires us to sell National Lottery products to anyone who is eligible and is aged 16 years or over,” he says.

“Now that the decision has been made, we’ll be doing everything we can to implement the necessary changes as quickly as possible.”

It won’t happen ‘overnight’

For some critics, however, this is not quickly enough and Camelot CEO Nigel Railton was criticised in November after telling a session of the APPG on Gambling Related Harm that Camelot may need up to a year to implement the changes.

Predictably, APPG chair Carolyn Harris described Camelot’s proposed timeframe as “unacceptable”, while Conservative MP Richard Holden told the Telegraph it was, “farcical to suggest that it would take 12 months to replace a few sticky signs in shops”.

However, Hickson says it isn’t that simple. “The National Lottery is a vast and complex operation, with a network of 44,000 independently owned retailers across the UK and more than 8.5m active registered players, making it Europe’s largest online lottery in terms of sales.

Camelot Lottery Solutions

“With our operating licence requiring us to ensure that the minimum age to play appears on all physical materials, as well as in all online channels, the changeover will not happen overnight. This isn’t simply a case of sending new stickers to retailers or flicking an online switch.”

In retail he says about 80 individual items need changing or removing and in online more than 50 separate areas need to be addressed.

“On top of that, any Covid-19 restrictions will need to be taken into account to ensure that we implement the changes as safely and responsibly as possible,” he adds.

In any case, the government has given Camelot until October next year to make the necessary changes, although Camelot has since said it will make all changes before this, with all online changes to be complete by April.

Online the problem area

This should perhaps stand it in good stead given it’s the online channel that seems to have pushed the government to take action. When the decision was announced on December 8, Minister for Sport, Tourism and Heritage Nigel Huddleston referenced the trend towards online play as a key factor.

“Patterns of play have changed since its inception, with a shift towards online games, and this change will help make sure the National Lottery, although already low-risk, is not a gateway to problem gambling,” he said.

Clean Up Gambling founder Matt Zarb-Cousin also identifies online as a key problem area: “Allowing under 18s to buy lottery tickets means they’re also allowed to engage in scratch cards and online instant wins, which have more in common with online casino games than the National Lottery draw.

“Permitting children to gamble up to £350 a week on these products was a mistake, and it is welcome that the government has already committed to increasing the minimum age to 18.”

Camelot’s most public rival in the bid for the fourth National Lottery tender, Sazka, appeared to be of a similar view when it released a statement in support of raising the age prior to the government’s decision. It referenced the fact that while it limited sales of all lottery products in four of its five European markets, it also restricted online sales in the fifth.

“We support the change because this is the age limit in four of our existing European lottery markets, where we have proven that innovation and strong player protection measures can work in tandem to grow lottery sales and fund good causes,” a spokesperson told iGB.

“You must be 18 to purchase lottery products in all of our markets with the exception of Austria, where the age limit is 16 in retail stores in accordance with domestic law.”

Whether Sazka can gain any political advantage in the tender process for its anti-under-18s stance and track record remains to be seen and will depend to some extent on Camelot’s rollout of the changes.

But a perhaps more important political question to be raised by the government’s National Lottery announcement is how much further it will go on restricting gambling or gambling-like activities for under-18s.

While National Lottery sales to children may have been one focus of recent negative attention, the situation with loot boxes is arguably a much bigger issue.

Indeed, Mark Griffiths, psychologist and director of the International Gaming Research Unit at Nottingham Trent University, told iGB last year that if there had been an increase in problem gambling among young people, as was reported at the time, it was simulated gambling activities such as loot boxes that were the most likely cause.

“As far as I’m concerned loot boxes are a form of gambling,” he said, with his view having been echoed by many others recently, including a House of Commons Committee and the Children’s Commissioner for England.

Camelot Lottery Solutions

Although the Department for Digital, Culture, Media and Sport’s announcement on the review of gambling laws didn’t specifically say loot boxes were under review, it referenced the government’s call for evidence on the topic, which was launched in September.

Camelot Lottery Solutions

Given the House of Lords Gambling Select Committee recommended in July that the government shouldn’t wait for the Gambling Act review to classify loot boxes as gambling and that one of its other recommendations was to raise the National Lottery age to 18, it’s entirely possible loot boxes could be next in the government’s firing line.