BSkyB poised for bid to run Lottery
14 May 2006

? Murdoch prepares to challenge Camelot
? New format could include text message bets

BSkyB, the pay-TV group headed by James Murdoch, is preparing a bid to run the National Lottery. The company is believed to be in discussions with potential partners about forming a consortium with the aim of submitting a bid by the end of the year.

Sky's interest is likely to raise eyebrows in Westminster. The Murdoch family wields huge influence, and any attempt to expand its interests will be viewed with suspicion by some. It will also alarm lottery incumbent Camelot.

A senior Sky source said the lottery offered 'collaborative opportunities', but added that it was unlikely to be lead partner in a bid. News of Sky's interest comes as the race to land the next licence heats up. Tomorrow the National Lottery Commission (NLC) is holding a private briefing in London for up to 40 companies that have expressed an interest in bidding for the licence, which will run for 10 years from February 2009.

The UK lottery is one of the most profitable in the world, and the new licence will extend its reach. The winner will be encouraged to roll out new technology to maximise sales through mobile phones, digital television and the internet. Consortiums have until the beginning of December to submit bids.

BSkyB already sells lottery tickets over its betting channel, Skybet, but it could dramatically increase its ratings by screening the weekly draw on Sky One and devising a new format that could also be televised.

'BSkyB has just spent the best part of ?2bn on premiership football. It will need to recoup that money and it will seek to raise the profile of its gambling products by getting involved in the lottery,' said one industry source.

The company will face competition from overseas gambling and technology firms eager to demonstrate that they can run the lottery well. Similar games are being set up all over the world and the chance to run one of the world's most successful is making the race to land the UK licence the most competitive ever.

Operators from China, Australia and Greece are expected to attend the NLC meeting tomorrow. They will be joined by investment bank Lehman Brothers, which is also trying to put a consortium together. Other possible bidders include Sir Richard Branson and GTech, a member of the consortium that won the first lottery licence, but later pulled out.

Camelot is still regarded as the favourite to win the new licence. A preferred operator will be chosen in April next year.

Associated Link: http://observer.guardian.co.uk/business/story/0,,1774161,00.html
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