- This story has been corrected: please see final paragraph
Camelot wants the commission to suspend or revoke the Health Lottery’s licences because it believes the organisation contravenes the Gambling Act 2005.
It claimed that the Health Lottery’s 51 community interest companies were not separate entities because they share the same directors and registered office. The company also argued that the Health Lottery, launched by media owner Richard Desmond, is unlawful because it is commercial.
But in a letter to Camelot sent on Tuesday, seen by Third Sector, the Gambling Commission’s general counsel Neil McArthur said the proposed review would have "no arguable ground and no realistic prospect of success".
McArthur said the commission had left it too late to apply for a review of the Health Lottery’s licences because it should have acted within three months of them being granted.
The licences were granted to the Health Lottery and the 51 community interest companies linked to it between September 2010 and August 2011.
The commission also rejected Camelot’s claim that the Health Lottery is really a single lottery rather than a series of society lotteries under one brand.
It added the Health Lottery was entitled to charge a reasonable management fee for organising the game and nothing in the Gambling Act 2005 precluded it from making a profit.
It said it was "keeping under review" the level of management costs the companies recovered from the Health Lottery, but recognised that it had considerable start-up and marketing costs in the early stages, which it would expect to reduce over time.
The commission’s letter was a reply to one it received from Camelot a fortnight ago threatening to apply for a review unless the commission took action against the Health Lottery.
A spokesman for the Health Lottery said: "The commission has confirmed that Camelot’s allegations against the Health Lottery are devoid of any legal merit and will be challenged by it in court if necessary.
"We have held a licence as an external lottery manager since September 2010 and have been operating under licence since September 2011, during which time we have raised more than £12m for good causes."
A spokesman for the commission said it had nothing to add to the letter.
Nobody at Camelot was available for comment.
- The story says McArthur said the commission had left it too late to apply for a review of the Health Lottery's licences. This should say Camelot had left it too late.