Camelot sacks GTech as lottery cleans up its act

A NEW five-member body was set up yesterday to regulate the National Lottery as it emerged that lottery operator Camelot had bought out the stake of its controversial American partner GTech.

Chris Smith, Secretary of State for Culture, Media and Sport, said the new Lottery Commission would reduce the risk of conflicts of interest. The move follows the resignation of the first lottery watchdog following Virgin chief Richard Branson's libel victory in the High Court earlier this year.

Peter Davis stepped down from his position as director general of Oflot after the hearing, at which Mr Branson said he had been offered a bribe by Guy Snowden, a director of GTech, which held a 22.5 per cent stake in Camelot. Mr Snowden wanted Mr Branson to drop out of the race to run the lottery.

It emerged that Mr Davis had accepted free flights from GTech, which is currently under investigation by Oflot over whether it is a "fit and proper" company to be involved in the National Lottery.

Yesterday Camelot, which has been under pressure to sever its links with the American company, said it would pay pounds 51m for GTech's stake. The buyout leaves Cadbury Schweppes, Racal and De La Rue with a 26.67 per cent stake and ICL with 20 per cent.

Camelot insisted yesterday that the changes would make no difference to the day-to-day running of the lottery.

In a statement it said: "Camelot believes this is the right response to the public mood for a largely British-owned operator of the National Lottery, and that it is in the best interests of lottery players." GTech will continue to supply Camelot with lottery systems and services.

Mr Smith said he welcomed Camelot's "sensitivity to the public mood". But he added that it would be wrong to say anything further until Oflot's acting chief, John Stoker, had completed his investigation into GTech's position.

Under the changes announced yesterday by Mr Smith, the post of Director General will be scrapped to make way for the five-strong Commission. The Commission will still be serviced by Oflot and will have the same duties and functions as the director general.

Mr Smith said: "This is good news for the good causes because they'll be assured of support from a team of people overseeing their income.

"It's good news for the operator because it will not be subject to the whim of a single individual regulator.

"Above all it's good news for players because they'll be assured that the lottery is being run properly."

The changes will be introduced as an amendment to the National Lottery Bill which is due to come before MPs for its second reading next week.

The new structure is expected to be up and running by 1999, in time to oversee the competition for the new Lottery licence to begin in 2001.

The Commission replaces plans in the lottery Bill for an "advisory panel" to help the director general choose the next operator.

Mr Smith said: "[The Commission] will reduce the risk, actual or perceived, of conflicts of interest and regulatory capture, and remove the focus on an individual."