Billionaire newspaper owner Richard Desmond is planning to submit a bid for the UK’s National Lottery, hoping to take over the business when an opportunity to acquire the lucrative franchise comes up again in 2019.
Currently, the UK’s largest lottery is operated by a company known as Camelot, which has run the drawings since 1994. The last time another firm attempted to challenge them for the franchise was in 2000, when the Virgin Group failed in an effort to take over the business.
Camelot’s current rights to the lottery program will expire in 2023. However, the contract renewal process is expected to begin in 2019.
Media Mogul Moves to Gambling
Desmond is the founder of Northern and Shell, a parent company that publishes both the Daily Star and Daily Express newspapers in the UK, as well as several magazines. That company also controls the Express Newspapers group of publications, which includes the Daily Express and Sunday Express newspapers.
In more recent years, Desmond’s interests have turned to gambling, and more specifically, to lotteries. Northern and Shell operates the Health Lottery, a collection of 51 local lotteries that raise money for good causes related to health.
But even combined, all of these drawings pay out less in winnings than the National Lottery. The Health lottery has actually lost £160 million ($210 million) since its inception in 2011. One issue is that the Health Lottery is limited in the size of the jackpots it can offer, a regulation that Desmond has tried to convince the government to change.
At the same time as his company has tried to enter the gaming sector, Desmond has been reducing his media holdings. In 2014, he sold Channel 5 to Viacom, and is currently looking to sell some of his major newspapers to the Trinity Mirror group.
Canadian Group Currently Runs Lottery
That suggests an overall change in focus, with the National Lottery being the potential crown jewel in a budding gambling empire. In order to make that happen, however, his firm would need to come out on top in the bidding process against Camelot, which has now been running the lottery for more than 20 years.
One of the strategies Northern and Shell may pursue is to paint Camelot as an outsider. The company has been owned by the Ontario Teachers’ Pension Plan since 2010, when the Canadian fund bought the company for £389 million ($510 million).
“The British people would not mind a British company doing the British lottery,” Northern and Shell group editorial director Paul Ashford told the Financial Times, which first reported Desmond’s planned bid.
Camelot has resisted increased competition in the UK’s lottery industry, saying that more firms in the business could reduce the share of ticket sales that go to winners and good causes.
Camelot’s time as the operator of the National Lottery has not been without controversy. Last year, the Gambling Commission fined the company £3 million ($3.93 million) for an “isolated incident” in which a player likely committed fraud to claim a £2.5 million ($3.28 million) prize.
Overall, the National Lottery has awarded more than £63 billion ($82.6 billion) in prizes since its inception