Memorandum submitted by Mr Abdulla J Dharamsey
1 OCTOBER 2001
1. The recent Judicial Review ordering the
National Lottery Commission (Mr Justice Richards' Order of 21
September 2000) to include Camelot Group the incumbent Lottery
Operator prior to deciding whether it or the "preferred bidder"
The People's Lottery which has allegedly guaranteed to raise £15
billion (50 per cent more than Camelot) for the so called good
causes, should be the next National Lottery Operator has totally
undermined the credibility of NLC. As the Select Committee must
be aware, the Commission was established just over 18 months ago
to replace OFLOTThe Office of The National Lottery that
was responsible for granting the original licence to Camelot in
May 1994 after appraisal of bids from eight different parties.
As someone who was retained as a Consultant Advisor to one of
the bidders in 1994 and actively involved in putting together
the Third Bid prior to our decision to withdraw (see letter to
NLC of 28 February 2000),
we feel the Commission had already contravened section 5(3) of
The National Lottery, etc Act 1993 (as amended by The National
Lottery Act 1998) and altered its own guidelines and terms of
reference (see News Release dual dated 24 June-21 September 2000).*
With time being of the essence and to avoid further litigation,
we recommend that BOTH bidders should be granted a seven-year
licence with a review after three or four years ie by September
2004-05 to enable either Operator to exercise a break clause to
terminate its Licence. As the Select Committee is aware, an amendment
to the relevant legislation will be required to accommodate this
scenario and relevant connected matters like names to be used
by the Operators (say Camelot and People's Lotteries respectively),
etc. Both Licensees should be required to install new machines
by 30 September 2001.
2. Relevant correspondence between Trigger
7 Lotto and NLC from 29 December 1999 and various attached documents*
dated thereafter should be read in conjunction with this memorandum,
to enable the Select Committee to understand how our realistic
bid details carried by The Financial Times on 19 February
2000ten days before the official deadline were formulated.
Apart from the named personnel (see News Release dated 21 February
and several market researchers, our prospective consortium sought
the assistance of just two renowned academic scholars from leading
UK universities. The total cost of the bid proposal of £598,500
was underwritten by the sponsoring bank which is currently backing
our e-commerce organisation EZEELOTTO.COM, probably the largest
on-line football lotto which published its web site on 16 August
2000. As at 30 September 2000, it had been "viewed"
by over 800,000 people on the Internet!
1. The Lottery tickets and Instants' cards
could continue to be sold as at present except that "Group
Play" should be encouraged for the on-line game. There could
also be officially endorsed agents who would target British Expatriates
and British bank account holders living abroad to participate.
The UK 649ers Lottery Club (previously 649 Club Fortune set up
by me in April 1995 just five months after the Lottery was launched)
now owned by another and based on Mainland Europe has over 350,000
members who on average spend £2 per draw equivalent to around
£700,000 per draw for 104 draws every year!
1. If there are to be TWO Operators, the
competition to generate more would be there and the NLC could
be charged with a duty to monitor the lotteries according to the
obligations and expectations upon the Licensees as set out in
the "Invitation to Apply" document issued previously
by the Commission.
1. In view of the incompetence, indecisive,
incurious, incredulous, inconsiderate, controversial and prejudicial
decision-making by the present NLC which eventually led to a successful
legal challenge by the aggrieved Lottery Operator, the Cultural
Secretary could be advised to alter the make-up of the Commission
pursuant to granting of the Licenses to the Operators to retain
confidence in the licensing and regulatory body. There is no need
to have another QUANGO to oversee the Lottery.
1. During the 19 separate detailed market
surveys carried out by us prior to the 29 February deadline for
the Lottery bids, this problem was found to be prevalent in respect
of sale of Instants' cards rather than the on-line Lottery tickets.
Presumably the number of checks that the Lottery Retailers are
subjected to could be slightly increased. Most 15-16 year olds
carry a different form of photo card from those under 15 and this
could be demanded as ID prior to selling Lottery tickets and Instants
cards to them.
1. In our considerate opinion, the promotion
of the Lottery within the UK is quite satisfactory. As we mentioned
in our News Release of 21 January 2000, there was bound to be
a PF factor (Participation Fatigue) that would "set in"
some time. Recent review of the turnover indicates an upward trend
as greed begins to take over. However, the public image of the
National Lottery is a separate issue which requires an in depth
analysis which my expertise does not enable me to comment upon
or give a justifiable opinion.
OF TNL UPON
1. There is bound to be a deluge of comments
and arguments in respect of this matter from qualified and seasoned
professionals from large charitable and voluntary organisations
for the Select Committee to ponder and discuss. If there is any
sympathy, it must be for the very small single-issue charities
that lack the personnel to market and promote their objectives
to a wider audience.
OF TNL UPON
1. As someone who has been involved in innovating
betting and lotteries for nearly 10 years, I have noticed that
the lobby for the gambling industry is active, persistent and
powerful. Most of the largest bookmakers have already set up offshore
betting offices which attract the lucrative non-European clientele.
The Home Office has been issuing gaming licenses like confetti
and the casinos are flourishing if audited accounts of some of
the relevant companies are anything to go by. The Football Pools
promoters have suffered the most but at their own peril for failing
to improvise prior to the launch of the Lottery. Recent take-over
of Littlewoods and Zetters by entrepreneurs seems to have instilled
confidence back into the industry although only 20 per cent of
the numbers who actively "played and invested" in the
Pools over six years ago still do. The jackpot has dropped from
around £2.2 million to about £500,000 despite increase
in the stake monies. Also, due to no royalty agreements in force
between Camelot and the Pools promoters or the popular newspapers,
the latter have been using the Lottery numbers to enhance their
turnover (Littlewoods and Vernons) and newspaper sales (The
Sun in particular) to the eventual detriment of the former.
We had previously raised this point in relation to the newspapers
with Camelot in 1996 to no avail as the Lottery Operator was doing
very well at the time after introducing the Midweek Draw!
1. The present level of Lottery Duty is
not excessive in comparison to other privately operated National
Lotteries in the Western World. Perhaps, the Government could
be asked to consider reducing this to ten per cent and seek a
reciprocal 2 to 3 per cent increase in contribution to the National
Lottery Distribution Fundan indirect gesture of goodwill
towards the good causes by the Treasury.
1. The NLDF should be required to distribute
the regular payments by the Lottery within a specified period
of time to enable the various good causes to accrue interest on
their share of the Lottery monies. This exercise would enable
more projects to be considered for grants rather than the good
causes hierarchy having to make contingency decisions. The overall
loss of interest to NLDF would be insignificant. The good causes
should also be allowed to invest their treasure troughs in short-term
Government backed securities.
2. The present practice of unclaimed winnings
being transferred to NLDF after 180 days of the Draw should be
extended to 365 days as in most countries. In principle, these
monies technically "belong" to the Lottery winners and
a year is a reasonable time frame to enable a winner to make a
claim. Furthermore, the Lottery Operator must be required to pay
back any interest earned on those unclaimed winnings along with
interest accrued on the weekly direct debits it requires the Lottery
Retailers to transfer to its designated account(s).
1. There are no valid suggestions we intend
to make on this issue as any arguments or comments pertaining
to which existing statutory good causes should get what and whether
new causes to benefit from the National Lottery via NLDF should
be introduced, etc is a matter for the Government and those representing
the various benefiting causes.
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