National Lottery Commission refuses operator bid to offer commercial services
National Lottery Commission refuses operator bid to offer commercial services
Camelot’s bid to offer payment services at its National Lottery terminals has been turned down.
The National Lottery Commission issued its ruling late yesterday, which will put pay to the UK lottery operator’s attempts to add mobile phone top-ups and electronic bill payments to its kiosk services.
The proposal had lined up a collaboration with Santander, the Cooperative Bank, the Post Office and an unnamed retailer.
But the regulatory body cited serious concerns about the plans in relation to European Union (EU) and competition law in its ruling, which it said took into account the views of interested parties and legal advice in this complicated and developing area of law.
Taking a cautious approach
In a statement, the Commission’s chief executive, Mark Harris, said: “The Commission is here to protect the long term propriety of the National Lottery and the £1.6 billion it raises annually for good causes. We cannot, as a public body, consent to the proposal that is before us when doing so may place us in breach of European competition law. We have considered whether the risks involved can reasonably be mitigated but have concluded, based on the advice we have received, that they cannot.”
The full rationale for the decision is available to download on the Commission’s website, here.
Needless to say, a number of payments players were keen to express their opinion on the ruling.
Electronic payment provider, Epay, for example welcomed the decision to avoid any potential monopolisation of the market.
Paul Bartholomew, managing director of Epay, said: “We are delighted that, despite their lobbying of MPs, it has been recognised that Camelot’s monopoly with the lottery would have distorted the marketplace and would not have been fair competition.”
Reshaping payment services
Camelot, however, responded to the ruling by saying its commercial services team remained confident that it will enter this market in due course, but that it was “carefully considering its options”.
Paul Charmatz, Camelot commercial services managing director, stated: “This is a bewildering decision and without precedent in EU history when you consider that all over Europe other lottery operators offer these services to support their retailers.”
The operator cited independent analysis by KPMG that found the commercial services market in the UK was a ‘comfortable oligopoly,’ where restrictive practices and exclusivity clauses prevail; that current operators earn excessive profits from their businesses and do not distribute them to retailers; and that good causes would miss out any share of the additional revenue.
National Federation of Retail Newsagents president, Parminder Singh, added: “We remain of the view that customers are best served by having available as wide a range of choice as possible as to where and how they pay their bills and will continue to work to achieve this end.”
