The National Lottery Commission (NLC) has rejected Camelot’s application to undertake “ancillary activities” because of “serious” concerns the proposal breaches European Union competition law.
Camelot has been in talks with the NLC for over two years about offering services through its lottery terminals. It had argued that the services could raise an additional £5.2m annually for good causes.
NLC first rejected Camelot’s request in July last year. The company sought to allay NLC concerns with measures including employing a competition law officer to police the service.
The lottery watchdog, however, says that the legal advice it recieved suggests Camelot would have an unfair advantage over rival payment services firms such as PayPoint and epay.
Mark Harris, chief executive of NLC, adds: “We cannot, as a public body, consent to the proposal that is before us when doing so may place us in breach of European competition law.
“We have considered whether the risks involved can reasonably be mitigated but have concluded, based on the advice we have received, that they cannot.”
Camelot described the decision as “bewildering” and argued that other European lottery operators offer similar additional services.
It adds that it is considering its options and “remains confident that it will enter the commercial services business in due course”.
Camelot’s proposal was backed by retails associations including the National Federation of Retail Newsagents, which argued that Camelot would provide additional competition and boost service.