The operators of the National Lottery have lost a High Court action in which it accused a lotteries watchdog of failing in its legal duty to protect it from Richard Desmond's controversial “rival” Health Lottery.
Camelot UK Lotteries had asked two judges in London to declare that the Gambling Commission is "unlawfully and unreasonably" failing to set up an adequate review of The Health Lottery (THL) scheme.
The scheme manages and promotes rival draws on behalf of 51 organisations and charities, raising money for a variety of health causes in what are known as "society lotteries".
Camelot claimed that, because of the extent to which the 51 are controlled and accountable to THL, the scheme is not a collection of single lotteries but has become a rival national lottery.
It also claims the scheme is costing it £1 million a week.
At a hearing in July it was argued on behalf of the Commission that Camelot's legal challenge was fatally flawed by delays in seeking judicial review and was a "disguised" attempt to interfere with the Commission's exercise of its discretion.
Camelot's action was dismissed today by the two judges.
In a written ruling Lord Justice Stanley Burnton, who heard the case with Mr Justice Kenneth Parker, announced that he would "refuse Camelot permission to proceed with its claim for judicial review, on the grounds of its delay and its failure to establish a claim with a real prospect of success".
He said he agreed with the Commission "that the question whether multiple society lotteries should be permitted is a political question, to be determined by the Government or Parliament".
After the ruling, Camelot said it was "disappointed" by the judgement and "intends to lodge papers with the Court of Appeal against what we believe to be a legally flawed and unfair decision by the court".
It added in a statement that despite the ruling it welcomed the fact that the case has "clearly highlighted the need for urgent Government action to close a loophole in the Gambling Act 2005", which it says "has been used by The Health Lottery to position itself as a direct rival to The National Lottery".
Dianne Thompson, Camelot Group CEO, said: "It is now imperative that the Government acts to close this loophole and to ensure that the law mirrors the intention and will of Parliament that there should be only one National Lottery.
"Time is of the essence - the longer the period of political inaction, the more incentive there is for other commercial operators to establish similar mass-market lotteries that would effectively cannibalise National Lottery sales and returns to the good causes.
"We are therefore calling on the Government to set out immediately the process and the timetable it intends to pursue in order to discharge its ultimate responsibility for The National Lottery and the good causes it supports."
At the July hearing, James Goudie QC, for the Commission, accused Camelot of "seeking to impose its own gambling policy interests on the Commission because neither the Government nor Parliament has accepted that (Camelot's) desire to shut down the scheme is in the public interest".
But Lord Pannick QC, representing Camelot, said the Commission had expressed considerable concerns about the legality of THL, launched by Richard Desmond's Northern and Shell.
He said the only reasonable and lawful response was a statutory review with sufficient scope to determine whether the scheme complied with the 2005 Gambling Act.
Lord Pannick said that, since Camelot's legal challenge had been launched, a review has been set up by the Commission, but it is confined to issues of "marketing and promotion", and is too narrow in scope to address concerns over the control and accountability of THL.
Lord Justice Stanley Burnton, after pointing out that the question of whether multiple society lotteries should be permitted was a political one, said that "multiple society lotteries are not prohibited by the Act".
He said: "The Commission has correctly determined that the real question relating to the Health Lottery is whether it, in practice, satisfies the licensing objective of fairness and openness, given the misleading widespread public perception of a single lottery benefiting a single society.
"That is the question addressed in the current statutory review."
The Gambling Commission welcomed the court's decision on Camelot's application for a judicial review.
A statement on its website said: "The review looked at alleged failures by the commission to take appropriate regulatory action in relation to the Health Lottery.
"The court has supported both the commission's interpretation of the law and its approach to the compliance of the Health Lottery and its constituent parts."