Tycoon Desmond Gambles On Health Lottery Sale
The media tycoon Richard Desmond is exploring a sale of the lottery business he launched just over two years ago after receiving a string of approaches from potential buyers.
Sky News has learnt that Mr Desmond, owner of the Daily Express newspaper and Channel 5 television network, is at the early stages of considering a sale of the Health Lottery.
The potential disposal comes as Mr Desmond, one of Britain's wealthiest self-made men, looks set to make a stunning return by offloading Channel 5, which he bought in 2010 for just over £100m.
Among the prospective buyers who have approached Mr Desmond about buying the Health Lottery during the last year are understood to have been Vincent Tan, the controversial owner of Cardiff City Football Club, and Playtech, an Israeli gambling software group.
An unnamed major UK retailer is also understood to have enquired about Mr Desmond's willingness to sell, insiders said on Friday.
The media entrepreneur is understood to believe that a new owner of the Health Lottery would have a ready-made platform for submitting a competitive bid for the National Lottery licence when it enters its next tendering process.
Mr Desmond's business is understood to meet Gambling Commission standards in areas such as player protection, financial soundness, technology operation, fulfilment and risk management
Camelot, which is owned by a Canadian pension fund, has run the National Lottery since its launch in 1994, and in 2012 won a four-year extension to its latest licence, which expires in 2023.
Mr Desmond is said to have invested approximately £65m in the Health Lottery since acquiring it, and has raised £43m for health-related causes, partly thanks to ticket sales buoyed by heavy promotional activity in his other media outlets.
It is understood Mr Desmond is seeking well over £100m from its sale.
Two years ago, Mr Desmond won a crucial legal battle with Camelot, which had argued that the media tycoon was unfairly competing with it.
The defeat represented a significant blow to Camelot, which recently doubled the price of Lotto tickets to £2, the first increase since the National Lottery's launch.
To comply with lottery regulation, the Health Lottery is structured as 51 local society lotteries, with each one representing one or more local authority areas across the country. Insiders said Health Lottery ticket sales had increased "significantly" since the
An indication that Mr Desmond's consideration of a sale of the Health Lottery is at an early stage lies in the fact that he has not appointed investment bankers to run a formal auction.
It is unclear whether any of the parties which have approached him about a deal remain interested in buying the Health Lottery.
If he does sell the Health Lottery and Channel 5, for which analysts say he would receive at least £500m, it would still leave Mr Desmond as a powerful figure in the UK's media sector, with assets including the celebrity magazine OK! as well as the Daily Express and Daily Star newspapers and their Sunday sister titles.
Mr Desmond declined to comment on Friday.
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