10 May 2002
The National Audit Office concluded, however, this week that despite a judicial review and several resignations, the commission awarded Camelot the second lottery licence in December 2000 on a sound basis.
The NAO investigation came after a high-profile and often-bitter saga between Camelot and The People's Lottery. The commission had been forced to delay its decision to award the new licence by five months, initially rejecting both bids.
The NAO estimates the costs of bidding alone were between £3m and £4m. The commission also lacked powers to force Camelot to reveal the details of its retail outlets, to co-operate in any handover and to transfer intellectual property, which substantially increased the financial risk for any new bidder.
The commission was also found to have left the lottery vulnerable to a serious risk of suspension. It had no contingency plans in place and, when both bids failed, was open to the mercy of Camelot to agree an interim operating licence.
'The commission's decision to award the second licence to Camelot was soundly based,' said auditor general Sir John Bourn. 'However, there may well be no competitive pressure next time. The commission and the department must do all they can to level the playing field and eliminate unnecessary demands on bidders.'
PFmay2002
