Lottery operators should not be allowed to cream off the profits, Richard Branson tells Madeleine Wackernagel
Richard Branson is a firm believer in capitalism, but with one exception — a national lottery. The British entrepreneur, in Johannesburg last week to garner publicity for the inaugural flight of Virgin Airlines, was adamant that South Africa should not follow the British route.
“Putting a monopoly in charge of running a national lottery gives it a licence to print money; they can’t go wrong. Look at Camelot [the British operator] — it made 100-million profit in its first year of operation. When you consider the few pounds that individuals raise for charities on an annual basis, that is a huge amount of money to go to waste.
“That profit would have been better spent ploughed back into projects to benefit the public. After all, it is the poorest who play the most — so they must be seen to be getting something back.”
Branson has been approached by the South Africans for advice on how to run a lottery — but he fears the worst: “I have a horrible feeling South Africa will follow the British route. It would be a tragedy if a foreign company were to come in and cream-off millions in profits when South Africa so desperately needs those funds for regenerating the economy. I would love to be able to ensure this country does the right thing.”
While a lotteries authority has yet to be established in this country, the former Lotteries and Gambling Board has presented the government with three reports containing various recommendations, says Pieter Erasmus, director general, department of trade and industry.
The board also submitted a Lotteries Bill, which probably will be considered in the current parliamentary session. It provides for the establishment of a national lottery, owned by the state and run by a private company, as well as small, private and society lotteries.
Minister of Trade and Industry Alec Erwin will soon appoint consultants to evaluate existing draft legislation for the lottery; conduct market research on potential turnover; recommend staffing for the National Lottery Board; and recommend an operator.
Foreign and local advisers have shown considerable interest, says the department, but “due consideration will be given to all relevant factors before a final decision on the appointment is taken”.
In addition, Erasmus says criticism of the British model will be “duly considered in the licence contract to conduct the National Lottery. The consultants’ report on a possible lottery turnover will give an indication of which part of society will be the biggest lottery players.”
The British, says Branson, were blinded by dogma, hell-bent on private enterprise no matter the consequences or cost to the supposed beneficiaries. His disillusionment runs deep: he was one of the bidders for the right to run Britain’s lottery, but lost out to Camelot, despite his non-profit-making platform. His venture would have seen every penny of profit handed back to charity.
Branson’s solution would be to hire the best chief executive in the world — John Fitzpatrick, who runs the Irish lottery, is a good role model — and give him or her every bit of help and incentive to run the business profitably. But because the company is a monopoly, every care has to be taken to ensure maximum efficiency.
“There is a sense now in Britain that the lottery is tainted; it has become associated with greed, because of the size of the payouts and the profits made by Camelot. No longer is it seen as working for the good of the disadvantaged alone.”
We have been warned.