Branson’s gambling spirit could win him the jackpot

The Lottery’s future is undecided, but Microsoft’s support, apparently pure motives and the confidence to take risks are in Branson’s favour, says George Pitcher.

At first sight, it is tempting to say that the National Lottery Commission is poised to replace one set of spivs with another.

Whatever the undoubted qualities of Camelot in successfully establishing the world’s largest lottery in an environment that is considerably more risk-averse than the US, the image that will stick in most people’s minds is that of its directors emerging from newly-appointed Culture Secretary Chris Smith’s office, reeling from the bollocking that they had just received.

How distant those early days of New Labour in 1997 now seem. It was a time when the corruptions and indolent negligences of the Tory years were being rectified on a daily basis, or so it seemed as Number Ten’s Ministry of Information let every new triumph of the People’s Party be known. Things could only get better.

Little wonder that the press and broadcast media turned up outside Smith’s Whitehall office, entirely at their own initiative and without any prompting from the Govern ment, to witness and to photograph Camelot’s humiliation.

It only later emerged, of course, that as a private-sector enterprise, Camelot couldn’t be bossed about by a government minister, still less have its directors told to give their spectacular bonuses back and a settlement had to be brokered by the consummate diplomat, Peter Mandelson – a man who can clear up everyone’s messes except his own.

Camelot was nevertheless unfortunate to find itself the butt of political expedience. And the image of its directors as a bunch of fat cats, plundering good causes for their own enrichment is an enduring one.

Given Sir Richard Branson’s reputation for self-publicity, a degree of self-made wealth that the British find unforgivable and a train service that has staged an Oscar-winning performance of the old, nationalised British Rail at its worst, it would appear that, in awarding the National Lottery licence, the Commission is nothing if not consistent.

As it happens, the rail accusations are unjustified (as is the antipathy towards Branson’s wealth, but that’s just part of the Anglo-Saxon psyche). There has always been a serious misunderstanding in the public mind with regard to the running of privatised public utilities. It’s an attitude that dates back to the late Eighties, when privatisation of the local water authorities was widely compared with a hypothetical privatisation of air, as though sewage and water-transportation businesses didn’t exist.

Similarly, self-righteous commentators who bleat about Virgin trains take no account of the time it takes to generate and deploy investment in a private company, nor of the lack of such investment being available had the railways been left in the public sector. I say give Virgin trains a break. BR used to tell us that “we’re getting there” and we had to put up with that for no return whatsoever.

Where I think Branson and his colleagues face a far tougher challenge with the Lottery is in technological security. He has presumably satisfied the Commission on this score – the award of the licence is provisional only on financial security, I understand – but there is a modern tendency to believe that we now live in a such an information-technological and telecommunicationally advanced environment that anything is possible all the time with minimum effort. The rather more prosaic collapse of AltaVista’s flat-rate wholesale Internet-access package serves as a prophetic warning against such hubris. Sophisticated national, never mind international, computerised consumer infrastructure remains very challenging to run.

I wish the People’s Lottery well in this regard. As it happens, Branson has the advantage of software support from Microsoft, which must be, in reputation terms, several light years ahead of the comparatively dubious track record of Camelot’s GTech, whose technical glitch in 1998 caused errors in thousands of pay-outs. And anyway, as I say, the further guarantees required of Branson appear to be about finance rather than technology. I fancy that this is as much about the regulator covering its backside as it is about real perceived threat to the liquidity of the People’s Lottery.

Branson is talking of underwriting the project personally and, for once, we should believe him. He does appear to be putting his money where his grin is. After the launch and survival of Virgin Atlantic, we cannot doubt Branson’s credentials as a gambler.

And, since the People’s Lottery is non profit-making, this gamble doesn’t appear to be aimed at further personal enrichment.

Branson can’t possibly need more money or recognition, so we are left with the assumption that his motives must be pure. And, of course, he likes gambling.

The move last week by pools operator Zetters Group to offer spread-betting after its &£20m takeover of foreign-exchange market-maker IFX suggests that the British market is moving more towards the gambling spirit of the US. In this environment, a lottery run by a gambler as well as a businessman could play well in this developing national characteristic. We may not necessarily occupy the moral high ground in doing so, but in this endeavour we should wish Sir Richard well.

George Pitcher is a partner of issue management consultancy Luther Pendragon

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