National Lottery regulator Peter Davis is demanding an explanation from Camelot after Marketing Week revealed it had set up a company to run overseas lotteries without his permission.
In a bizarre twist, Davis could force Camelot to pay part of the profits it makes from running overseas lotteries to UK good causes.
Davis, director general of National Lottery regulator Oflot, was caught unaware after a MW investigation revealed that, in August, Camelot set up a company called Camelot International Services to run lotteries overseas (MW last week).
An Oflot spokesman told Marketing Week at the end of last week: “It (Camelot) has to apply to us to set up an international division.” But Camelot International Services has been a limited company since at least August 14 when Daniel Kane and Sharon Duffy, two employees, were registered as directors of CIS.
But as late as last Monday, Cam-elot was still denying CIS existed. Oflot is now demanding that it explains whether the new company complies with the terms of its licence.
Oflot wants Camelot to explain:
How CIS fits with Camelot’s brief of being a single-purpose company running a UK lottery.
Whether the new company is an “ancillary activity,” requiring Camelot to pay a proportion of profits from running foreign lotteries to UK good causes.
If operating lotteries overseas will divert resources from running the National Lottery in the UK.
Camelot now admits that CIS exists but says that it has not yet started operating and claims therefore there was no reason to inform Oflot that it had been set up.
See News Analysis, page 22