The licence to run the national lottery is up for grabs again, but some hopefuls say that the bidding process favors Camelot, the current UK Lottery operator.
As the sun beat down on the Hyatt Regency hotel in Mérida, on the Gulf of Mexico, several hundred delegates gathered inside last February for the World Lottery Forum.
Representatives of lottery operators from Niger to New Zealand were welcomed by Mexican president Vicente Fox. They were there for their annual conference to discuss the latest trends and technology.
Among the delegates was a group from Britain's National Lottery Commission (NLC), the national lottery watchdog. For them it was the perfect opportunity to gauge how much interest overseas operators would have in bidding for the licence to run the game.
Robert Foster, chairman of the NLC's project board, was encouraged by what he found. He thinks the level of interest is high.
"Our impression is that there are several people out there with a serious interest in bidding," said Foster.
This month the bidding process for the right to run the national lottery gets under way in earnest when the NLC publishes the draft invitation to tender documents.
It is the third time the licence has been up for grabs, and this time the pressure is on to ensure there is some genuine competition to keep Camelot, the incumbent operator, on its toes. But many observers think that Camelot is so entrenched that generating sufficient interest to create the competitive tension that the NLC craves is going to be near impossible.
Several parties have been linked with possible bids for the new licence, which will run for 10 years from 2009. They include Ladbrokes, the British bookmaker, which is said to be working in tandem with the Greek lotteries group Intralot; Tattersalls, the Australian gaming concern; Lottomatica, an Italian gaming group; and Lehman Brothers, the investment bank, where senior director Anthony Fry, who was closely involved in the formation of the national lottery, has declared his interest in setting up a consortium to bid.
Those contemplating forming bidding consortiums are being invited to register their interest with NM Rothschild, the investment bank that is advising the NLC. The Sunday Times can reveal that some companies have done so and they include Cable & Wireless and Thus, the British telecoms groups, and Wincor Nixdorf, the German IT company.
How many of these will eventually pursue bids is unclear. An executive at one international leisure company that has considered bidding said the return on running the lottery was pretty small, the cost was enormous, and the downside risk remained significant. "It has huge potential to damage your brand," he said.
The timing of the bidding process may not suit many of the large companies tipped to be interested. Lottomatica is working hard at integrating GTech, the IT supplier that was once a shareholder in Camelot. Tattersalls last week announced a merger with Australian rival Unitab. Scientific Games, an American company, has acquired Effnet. "There are a lot of changes going on and the supplier side is consolidating," said Foster.
The biggest question mark hangs over Sir Richard Branson, who has attempted to win the licence on the two previous occasions it was awarded - in 1994 and 2000 — and lost out. He is, as yet, undecided over whether to have a third shot.
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