Branson Wants Compensation

29 January 2001
Sir Richard Branson and the People’s Lottery consortium may not have gotten the contract to take over the National Lottery in the United Kingdom, but the tycoon and his group is not going away without a fight.

After being told the People’s Lottery was the leading candidate to take over the license of the lottery from Camelot, the group was then overlooked late in the bidding wars.

Camelot’s contract is up in October, and last August the National Lottery Commission gave qualified backing to the People’s Lottery bid to assume control of the lottery.

The group was also told that it would be the only candidate in the running to take over the license.

Since August, Branson's group invested more than £20 million to make its move to the lottery arena as effective as possible.

In the meantime, the Lottery Commission chairwoman who gave the group such favorable support, Dame Helena Shovelton, resigned as an appeal to the High Court by Camelot was heard.

The negotiation process was then opened back up and Camelot joined the fray to keep control of the lottery.

Last month, the People’s Lottery was told its bid had failed in favor of letting Camelot continue to operate the lottery.

The decision not only shocked Branson, but it also outraged him. He sent his grievances in writing to newly appointed Chairman Lord Terry Burns and demanded an explanation.

Last week, representatives from the People’s Lottery and the National Lottery had a 90-minute meeting. Branson wasn't satisfied with what he heard and has filed a £30 million compensation claim on the grounds that his group was misled throughout the negotiations.

Under the compensation claim, the People's Lottery is seeking to recoup the £20 million it spent to mount the bid plus an additional £10 million on the grounds that the members of the group were unable to channel their money to other projects during the process.

Among the members in the consortium is Bill Gates.

The group feels it deserves compensation because the whole process was a "sham."

The main ground for the People’s Lottery claim is the evidence that Lord Burns admitted it was easier to keep the license with Camelot than to give it to someone else.

A spokesperson for the People’s Lottery, was quoted on, as saying that the group was mislead to great extents.

"The feeling is that we went into this believing that there was a level playing field when there was not," the spokesperson said. "In August the People’s Lottery bid was said to be the best, but in December it was not. If we don’t get any joy from the Commission, legal action must remain a possibility."

The spokesperson also confirmed that the compensation claim was a result of last week's meeting.

"We met the Commission last week about the issue of compensation," he said. "They asked us to make that request in writing, and we will have it to them in writing this week."

The fact that the People's Lottery raised the money it was asked to raise to win the bid, according to the spokesperson, gives the claim credibility. "We have a strong case for compensation even before the Commission chose us in August and have an even stronger case after it backed us," he said.

Camelot, meanwhile, will begin its new cycle in October. It's planning to introduce new games as well as new terminals at shops around the country.