High stakes and drama anticipated for National Lottery 2020 tender

2020 will see a battle of titanic egos and high stakes take place, as the UK Gambling Commission (UKGC) launches its tender to operate the fourth National Lottery contract from 2023.

Monitoring early developments, UK media has branded the National Lottery tender as one of 2020’s most intriguing business narratives, as incumbent Camelot defends its position against hostile competitors seeking to end its 25-year reign.

This weekend, The Daily Telegraph reported that billionaire Sir Richard Branson – founder and chairman of Virgin -would enter UKGC proceedings by launching his third attempt to secure the National Lottery.

Riding champion stud Desert Orchid to Parliament in 1994, Branson launched his first ‘People’s Lottery’ campaign promising to ‘return all profits to charity’.

The People’s Lottery bid would be declined by the Major Conservative government, who would back the formation of a ‘Camelot operating vehicle’ formed by ICL, Racal Electronics, Cadbury Schweppes and De La Rue in partnership with GTech as lead lottery systems supplier.

Branson would contest the National Lottery’s second tender in 2000 by re-launching the ‘People’s Lottery’ bid, this time re-energised by the support of Compaq Microsoft and Kellogg’s.

However, an acrimonious bid against Camelot would be rejected by the Blair Labour government, which in its review underlined that the People’s Lottery had failed to demonstrate the hardware capacity capable of running a national lottery retail network – a factor Branson deemed as foul play by Camelot backers.

Having won back-to-back contracts in 1994, 2001 and 2009, securing the 2020 National Lottery tender will be Camelot’s biggest challenge to date, having faced recent political and media backlash regarding its fundraising and operations.

In 2018, a Public Accounts Committee (PAC) report detailed that National Lottery funding for good causes had fallen by 15%, despite Camelot increasing yearly profits by £39 million.

Furthermore, Camelot has been criticised for placing too much emphasis on its scratch card inventory, whilst its attempts to revive the National Lottery main draw were criticised by players for adding a further 10 balls to the format, which in turn inflated the odds of hitting jackpots and increased the number of weekly roll-overs.

Taking the fight to Camelot, newspaper tycoon Richard Desmond has instructed his Northern & Shell publishing group to launch a tech-savvy bid for the National Lottery in 2020.

The outspoken billionaire criticised the government for allowing Camelot to maintain its position as lead lottery operator when the company was sold to The Ontario Teachers’ Pension Fund in 2010 for £390 million.

Desmond maintains that the National Lottery should be operated by the British business stakeholders, rather than as an investment asset for a Canadian pension. Furthermore, in 2012 Camelot lost its UK High Court appeal against Northern & Shell, after challenging the UK publishers lottery format Health Lottery.

Securing interest beyond British shores, further parties reported to be developing bids include Dutch lottery incumbent Novamedia BV, the operator of European Postcode Lotteries and a restructured Czech gambling conglomerate SAZKA Group, which this summer secured a majority stake in Greek operator OPAP.

Entering 2020, the UK business community waits for the UKGC to publish its tender framework, in which the regulator will be supported by investment bank Rothschilds, auditor EY, management consultancy Deloitte and Law firm Hogan Lovells – four companies appointed to run the bidding process.