Camelot looks to expand abroad

Tim Holley Camelot Group's chief executive, is involved in serious talks with overseas investors about running lotteries abroad. The move could provoke a clash with the new government, which expressed some hostility to the lottery operator during the election campaign.

But Camelot, whose licence expires in November 2001, has dropped plans to float the company on the stock market. A leaked Camelot document in February revealed that Mr Holley was considering such a move.

Mr Holley said last week that Camelot had been approached by "many tens" of people and was talking to "less than ten" about expanding overseas.

The leaked document also referred to plans to expand overseas and exploit other potentially profitable opportunities, such as linking up with BSkyB and starting new video lotto games in pubs.

The details provoked widespread protest, particularly when the Camelot document stated that regulator Peter Davis was "sympathetic to overseas exploitation".

Mr Holley responded to the earlier row by stressing last week that Camelot would need government permission to expand abroad.

He revealed too that a preliminary court hearing will take place this week in the highly unusual private prosecution that Camelot is bringing against Ladbroke, Coral, the betting shop division of Bass, and Brent Walker's William Hill.

Camelot failed in previous attempts to challenge the legality of "49's", a numbers game joint venture between the three betting-shop groups.

Mr Holley claimed to be confident that Camelot will be able to bid again when its highly profitable seven-year licence ends. During the election campaign, the Labour Party said it would seek a "competitive, efficient, not-for-profit operator". Richard Branson's Virgin Group was a non-profit bidder among the eight competing for the lottery's first operating licence in 1994.

Mr Holley said Labour had yet to define "not-for-profit" and that he was confident Camelot would be among the bidders. "We've always expected to bid a second time," he said.

He said he did not believe the Government "would encourage a structure" that did not leave room for Camelot. "The new Government wants the lottery to be a success."

Through Camelot, UK lottery players have generated about pounds 3.2bn for charitable causes since 1994. In the half-year ended on September 14, Camelot made pre-tax profit of pounds 31.5m and awarded pounds 1.1bn in prizes, while pounds 567.8m was donated to good causes.