Learning to love (and live with) the lottery

The good, the bad and the unlucky: Camelot unrepentant about its mammoth first-year profits
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If you had just announced your first annual profits of pounds 77m and had been given a bonus equal to half your salary, you might allow yourself a little nap - perhaps to prepare to export the lottery abroad.

Having faced a morning of criticism from MPs and charities, Tim Holley, chief executive of the Camelot lottery operator allowed himself a brief rest on a sun-drenched deck chair in Green Park, London, yesterday.

The company's first annual results had laid bare the extent of Britain's lottery mania: punters spent pounds 5.2bn on instant and weekly draw tickets over the past year, equivalent to the gross national product of Costa Rica, or more than Britain's contribution to the European Union.

Of this, just under half was given away in prizes, pounds 1,416m went to good causes, the Government received a pounds 677m tax windfall and Mr Holley received pounds 120,000 in bonuses.

But far being reticent about the company's mammoth profits, Camelot bosses were yesterday in decidedly bullish mood. They revealed the company's efficiency was such that it had been approached to run similar operations abroad.

Indicating that these would be outside Europe, Mr Holley said: "It's early days and under our licence we're a single-purpose company but we would set up a separate company, which we're perfectly at liberty to do, and go and develop opportunities overseas."

And, despite criticisms that Camelot's monopoly had squeezed similar operations out of the market, the company yesterday warned of the consequences if bookmakers were allowed to encroach on its territory.

"One of the things that is of major concern to us is the prospect of bookmakers being allowed to bet on lottery numbers. Estimates suggest that this could mean as much as pounds 1bn a year off the revenue plan and, more importantly, pounds 300m off the good-causes plan or nationally pounds 2bn off during the remaining period of licence," said Peter Murphy, Camelot's financial director.

The company "was not afraid of competition", he said, but Camelot's effective return to the Government was much higher than any other organisation. "The nation is the loser if bookmakers bet on the lottery."

The announcement of the higher-than-expected figures yesterday prompted an immediate protest, with the Virgin chairman, Richard Branson, accusing Camelot of "having their cake and eating it".

The millionaire tycoon, who failed in his own bid to run the lottery, joined a chorus of complaints from MPs urging Camelot to give more of its net profits of pounds 1m a week to charity.

Referring to the national press advertisements Camelot had taken in anticipation of the furore, Mr Branson said: "No wonder Camelot had to take double-page ads saying that their job was not a piece of cake. They were right: it's not a piece of cake," he added: Today's figures prove that they have had their cake and eaten it too."

The Labour MP Gerald Kaufman called for the nationalisation of the lottery. "I think that a Labour government will want to have certainly a non-profit making, non-private sector lottery," he said.

But the Prime Minister told the Commons yesterday that Camelot's profits amounted to less than 1p in the pound. He said Camelot had been awarded the lottery contract by the regulator, who was convinced the company would achieve the maximum amount for good causes.

"That is the purpose of the lottery and they have achieved that spectacularly well, and they make substantial donations to charity," the Prime Minister said.

Camelot bosses, who received hundreds of thousands of pounds in bonuses as a result of the company's performance, were equally sanguine. Mr Holley said that the profit, after tax, of pounds 51.1m was in line with forecasts and should not come as a surprise to anyone.

"It's wholly wrong to assume that our profits will rise during the remainder of the licensing period," he said. "In fact, the amount we keep to operate the business will go down quite sharply as the amount going out in prizes and to good causes goes up."

Mr Holley admitted that some smaller charities might have suffered since the introduction of the lottery. But he ascribed any image problem to the fact that the company's energies had been devoted to securing its success rather than "going round saying 'Please love Camelot'."

"In 18 months we have become the most efficient [lottery] in the world. That's due to working very, very hard - that's a wonderful achievement and I'm proud of it, not defensive of it," he said.

With a regulator and a seven-year licence, Mr Holley said, the company "did not feel like a monopoly.

"Nothing is given. We really do have to work at it. People don't have to buy tickets."

Mr Holley said that in July the company would seek to have the pounds 138m prize money surplus - created by fluctuat- ing sales of tickets and earmarked for the five "good-causes" funds - re-invested in the prize pool.


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One of the few

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Riding pillion

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Money madness

Mukhtar Mohidin's pounds 17.9m win cost him his friends, his peace of mind and, almost, his marriage. After being chased half-way round the world by the press, He has settled down with his wife in a pounds 500,000 house.

Rat's tales

Dubbed the "Lottery Rat" before the ink was dry on his pounds 22.6m cheque, Mark Gardiner's ex-wives and girlfriends queued up to wish that his wealth would bring him misfortune, bad health and an early death.

Life in the fast lane

Car fanatic Lee Ryan was able to sate his passion for fast cars after he scooped pounds 6.5m and acquired a Ferrari quicker than you can say 0-to-60. Unfortunately, he had been unable to resist expensive motors prior to his win and is currently serving 18 months for handling stolen cars.

Playing for money

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When you're smiling ...

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Sweet dreams

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No-win situation

Virginia Bottomley had hoped to be another lottery winner, coming as she did from a troubled tenure as Secretary of State for Health. But, with each row over the lottery, a little more mud has stuck.