Lottery risks huge fines

CAMELOT, the winning bidder to run the National Lottery, faces a pounds 10m-a-week fine if it is late with its November launch, under a draconian penalty regime drawn up by the regulator, Oflot, writes Patrick Hosking.

The deadline leaves Camelot less than six months to train tens of thousands of retailers, manufacture and install on-line terminals, arrange a huge advertising campaign, and draw up arrangements with the BBC.

Oflot is understood to be prepared to levy a lateness penalty of about pounds 1.5m a day to ensure the good causes due to receive proceeds from the lottery do not miss out if Camelot cannot meet the deadline.

Camelot, a consortium of the confectionery group Cadbury Schweppes, security printer De La Rue, US lottery operator G-Tech, the communications group Racal and the computer firm ICL, beat seven other bidders for the coveted licence last week.

David Rigg, Camelot's director of communications, said: 'We're very confident we'll launch on time. We've done a considerable amount of preparatory work. We're fully aware of the risks involved.'

An Oflot spokesman confirmed: 'If they don't meet the date set for the launch and if they don't have the distribution network in place, then there are penalties set out in the licence.'

Shareholders are investing pounds 50m of equity in the project and have a pounds 75m line of credit.

Patrick Hosking,page 2

Played to win, page 3