Branson to cover £50m for lottery crisis fund

Sir Richard Branson pledged £50m of his own money yesterday as he began the four-week process of fine-tuning his bid to win the licence for the National Lottery.

Sir Richard Branson pledged £50m of his own money yesterday as he began the four-week process of fine-tuning his bid to win the licence for the National Lottery.

The Lottery Commission, which gave the billionaire businessman a month to resolve the outstanding issues surrounding his People's Lottery venture, has demanded that he put up an emergency prize fund in case ticket sales slump.

Sir Richard was in typically ebullient mood as he returned home from his Caribbean island, Necker, yesterday confident that the prospect of running the National Lottery was finally within his grasp.

As well as outstanding legal issues, Sir Richard has also to prove that he can raise the emergency prize fund that will ensure total victory over his rival, Camelot.

The Lottery Commission has made it clear that failure by the People's Lottery to resolve its concerns could open the way for a new bidding process, which could include Camelot again. As he talked over the issues with two of his partners, John Jackson, the deputy chairman of the company, and Simon Burridge, the chief executive, in the garden of his home in Holland Park, west London, Sir Richard was supremely relaxed.

"I will be meeting the Lottery Commission tomorrow and they will make clear what we have to do and then we have to get our priorities right," he said.

But he made it clear that the £50m would come from his personal assets and stressed once again that the People's Lottery remained entirely separate from his Virgin businesses.

"The £50m is not a hurdle but we do have to ascertain in what circumstances that money would be needed," he said. "The lottery bid has nothing to do with Virgin. This is a personal bid made by myself and various other people and we will decide over the next month how the £50m will be raised.

"I have personal assets and I have Virgin assets and it would be personal ones that I would be pledging. If we wanted to make this a Virgin lottery pledging Virgin profits then we could have done so but I feel very strongly that it should be separate."

Although he said he was happy that everything would be swiftly sorted out, Sir Richard said that he would not open any champagne until his bid had officially won, giving the People's Lottery the licence from 2001 to 2008.

Camelot's bid was rejected partly because of a software glitch which led to overcharging retailers and underpaying winners. The United States company GTech, which supplied the software, covered up the mistake until a whistleblower told the commission. Eight hundred Camelot workers are now facing unemployment from September next year unless the winning company can find jobs for them.

Earlier in the day, Sir Richard said he hoped to employ many of the "innocent people [who] will be jobless". But he later qualified this: "I said we want to run the People's Lottery with as low overheads as possible and if it means increasing the overheads [to employ the Camelot workers] it is unlikely it would be in our charitable interests to do so."

Although confident of winning, Sir Richard is well aware of the cynicism surrounding his pledge to run a profit-free lottery which cannot help but raise Virgin's profile. He insisted he was simply trying to do something good.

"Anytime anyone does anything philanthropic like this then their motives are questioned and that is dangerous because then no one will do anything else. But I have set up 200 companies and I make plenty of money from those for myself and the people around me and if I can do one thing that is good then why not?"

With that he popped open a can of Virgin Cola and basked in the sun in his garden as his colleagues bent their heads over files and columns of numbers.