Camelot’s bid to provide commercial services has been refused by the National Lottery Commission (NLC) on the basis that it would be in breach of EU and competition laws.

National Lottery Commission chief executive Mark Harris said: “The Commission is here to protect the long term propriety of the National Lottery and the £1.6bn 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."

Camelot had hoped to provide services such as bill payments and mobile phone top-ups through its existing network of National Lottery terminals.

Commercial Services managing director Paul Charmatz said: "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.

“Camelot will now carefully consider its options, but its commercial services team remains confident that it will enter the Commercial Services business in due course.”

National Federation of Subpostmasters general secretary George Thomson said that approval for Camelot’s bid would have provided more business for subpostmasters.

“This is a sad day for the bill payment sector and for subpostmasters,” he said. “We have said previously, that bill payment and mobile top-ups remain a hugely important source of revenue for post offices. The NFSP has been working closely with Camelot and Post Office Ltd, and had this been approved, the result would have been highly beneficial to our treasured national network of post offices."

However PayPoint chief executive Dominic Taylor welcomed the decision. “It would be entirely wrong for Camelot to be allowed to exploit its position as Lottery monopolist and spread its resources to offer unrelated commercial services,” he said.

“We are pleased that the National Lottery Commission has accepted the compelling arguments that the proposal was undesirable and contrary to the public interest. It's also good news for local shops whose earnings and footfall would have been undermined by this proposal.” 

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