Camelot promise a £250 million prize after they secure rights to run the lottery - Tuesday 7th of August 2007

Lottery operator Camelot will launch an unprecedented global prize draw with a jackpot of more than £250 million after it won the licence to run the game for another 10 years.

CEO Dianne Thompson said she was "thrilled" the operator had been named the National Lottery Commissions preferred bidder in the licence competition.

Camelot beat Indian firm Sugal & Damani - its only rival bidder in the contest for the third lottery operators licence.

Camelot has maintained its monopoly for 25 years, ever since the games launch in 1994.

Last night MPs voiced concern that effective competition for control of the game - which ministers say is vital to ensure maximum return for the so-called "good causes" - is in danger of collapse, as major rivals in the industry did not even bother to bid in the latest licence fight.

The idea of a vast jackpot draw spanning the globe is the centrepiece of the companys plans to develop the National Lottery.

A worldwide game would dwarf the existing EuroMillions weekly draw, in which nine countries combine to generate vast top prizes of £125million.

Some 50 countries and U.S. states have already voiced interest in taking part, and sources believe hundreds of millions of punters across the planet would push jackpot payouts to undreamed-of levels.

Each monthly draw would create 100 or more instant millionaires, and every few months the prize structure would be changed to produce one super-jackpot of more than £250million, smashing existing records.

The lure of suddenly becoming one of the worlds richest people would generate sales on an unprecedented scale, analysts believe.

Camelot has also promised to increase UK Lottery ticket sales and take less money out of the game as profit.

When the licence was last up from grabs in 2000, the company promised to raise £15billion for good causes if it secured the current seven-year licence, but later quietly reverted to a more modest pledge of £10.5billion.

Seven years ago the licence competition descended in to a summer of farce.

Camelot was initially ruled out of contention by regulators but then won a High Court victory and eventually snatched control of the game from under the nose of Richard Bransons Peoples Lottery consortium.

This time the Virgin tycoon opted not to launch another bid, claiming the odds were too heavily stacked in Camelots favour, and other high-profile operators also stayed away despite regulators efforts to attract competitors.

The National Lottery Commission was only saved the embarrassment when Delhi-based gaming company Sugal & Damani - previously little known in the UK - lodged a last-minute rival bid.

Shadow culture secretary Jeremy Hunt warned that the licence fight risked becoming a "walkover" for Camelot.

He said: "In the early days companies queued up to run the lottery.

"The Labour Government has consistently failed to reinvigorate the process and attract serious competition."

He said increased political interference in "good cause" spending was eroding public faith, saying: "Ministers now control 50 per cent of money supposedly raised for good causes, often diverting it to prop up the Governments own spending priorities."

The new licence comes at a crucial time for the Lottery with the game under huge pressure to raise as much cash as possible to help pay for the 2012 Olympics.

Camelot faced criticism last year over the scale of salaries for its key executives, echoing the bitter "fat cats" controversy during the late 1990s which saw Tony Blair voicing his "outrage" and ministers unsuccessfully trying to cut generous pay packets for Camelots directors.

The companys latest report revealed that Chief Executive Dianne Thompsons earnings leap by 44 per cent to just under £1million, including a £282,000 bonus - far higher than the salaries which sparked a damaging political crisis ten years ago.

MPs complained that the pay-rises increases were out of all proportion to the five per cent rise in ticket sales.

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