A recent decision of the Administrative Court provides guidance on when objections to regulatory decisions and statutory regulatory schemes can be resolved through judicial review, and when they should more properly be addressed to Parliament.

Key points

  • Delay should seldom frustrate a meritorious application for permission to bring a claim for judicial review.
  • Judges afford regulators a wide discretion and are reluctant to interpret statutory provisions purposively to deliver results that might not have been intended by Parliament.
  • Weaknesses in the regulatory architecture are often best addressed through political rather than legal solutions.

Lotteries in the United Kingdom

The Gambling Act 2005 (the "Act") sets out the regulatory regime that governs almost all gambling in the UK. The Act also establishes the Gambling Commission ("GC") as the main regulator of the gambling industry. In general the lawfulness of lotteries is determined by the Act and it is an offence to promote a lottery without an operating licence issued by GC. One exception is The National Lottery, which is subject to a separate regime with its own statutory regulator – the National Lottery Commission ("NLC").

UK gambling policy dictates that lotteries should not be conducted for private gain. Similarly, financial limits have been imposed to restrict the size of lotteries, protecting the monopoly status of The National Lottery as the only large lottery in operation. The National Lottery's position is in the public interest – maximising the returns to good causes. The current licensee is Camelot UK Lotteries Limited ("Camelot"). However, because large lotteries are potentially highly profitable there have been various attempts to circumvent these rules. In its recent judicial review of GC, Camelot alleged that the structure of The Health Lottery was the latest such attempt, exploiting ambiguities in the Act to create a competitor to The National Lottery.

The Health Lottery

The Health Lottery is a network of 51 Community Interest Companies ("CICs") which are individually licensed to conduct lotteries and outsource the promotion of their lotteries to the same "external lottery manager", The Health Lottery ELM Limited ("THL"). THL is also licensed by GC. Each CIC is formed to raise money for regional local health causes, and under each CIC's agreement with THL, 20.34% of lottery proceeds are donated to a relevant charity.

Under the Act, companies may only hold lottery operating licences if they are "non-commercial societies". In the case of The Health Lottery this means, in particular, being conducted for a non-commercial purpose other than private gain. The proceeds of each lottery draw may not exceed £10 million in a calendar year and the lotteries must comply with various other statutory restrictions. While the CICs are marketed by THL under a single strategy and brand, THL is charged with rotating which CIC each lottery draw is promoted for and tracking the proceeds so as to avoid breaching these restrictions. In exchange THL is paid fees.

Judicial review challenge

Camelot challenged GC's "ongoing failure…to take regulatory action" against this scheme. It alleged that The Health Lottery was in reality:

  • established and conducted for the private gain of THL and that the CICs failed the test for a non-commercial society, and
  • a single lottery rather than multiple lotteries, in breach of the requirements of the Act.

Camelot sought an order quashing GC's decision not to exercise its statutory power to review the legality of The Health Lottery's licences and an order requiring GC to perform that review. Supported by THL and the CICs, GC argued that the challenge was out of time, that the CICs were not for private gain and that, as an expert regulator, GC was afforded a substantial margin of appreciation in the exercise of its review discretion and had not acted unlawfully.


The Divisional Court (Stanley Burton LJ and Kenneth Parker J) refused Camelot permission for judicial review due to delay and because the claim had no reasonable prospect of success. Three key points of general application were made:


Delay will seldom be allowed to frustrate a meritorious application for permission to bring a claim for judicial review as "The Court should be very slow indeed to countenance continuing illegality" (para 67). Since GC had correctly construed the Act, this concern did not apply in this case. It was also noted that Camelot had "not been candid", failing to inform the Court of relevant discussions with The NLC in 2011. Further, Camelot had been in possession of the information required to bring a claim since early on and "must have been aware that substantial expenditure was being made in order to launch the Health Lottery". The Court therefore considered it inappropriate to extend time.


Interpreting the Act, the Court held that multiple society lotteries were permitted, and that The Health Lottery was in fact operated as such a scheme and not as a de facto large lottery. The CICs were not for private gain within the meaning of the Act and it was lawful for them to pay reasonable fees to THL and for THL to be operated for profit.

In support of these findings, the Court made useful remarks about evidence. Camelot had not suggested that The Health Lottery operated fraudulently or that any assets had been misapplied. Each week's lottery was operated separately. There was therefore no basis for piercing the corporate veil or aggregating proceeds when determining whether any given lottery breached the thresholds in the Act. The fact that THL had clever mechanisms in place to ensure that the ticket sales limit for each CIC was not exceeded did not "justify treating the two lotteries that week as if they are one."

Political questions and discretion

Crucially, "the question whether multiple society lotteries should be permitted is a political question, to be determined by the Government or Parliament" rather than a Court. Similarly, the question of whether the scheme violated GC's statutory objective of ensuring that gambling is conducted fairly and openly was "very much a question for the regulator" which was allowed "wide discretion".


Camelot has said it will appeal the judgment on the basis that it is "legally-flawed and unfair". However, Camelot has also sought to rely on the judgment insofar as the Court supported Camelot's call for "urgent Government action to close a loophole". As GC has previously noted, preserving the monopoly of the National Lottery is not one of its licensing objectives. One issue which arises from the case is that where the wording of primary legislation is clear (as the judges concluded it was), it is not for the Courts to seek to find an alternative construction to defeat attempts to construct schemes that are aimed at getting round what Parliament might have regarded as the mischief. Perhaps the key message of the case is that, in the absence of clear unlawfulness, perceived weaknesses in the regulatory architecture are often best addressed through political solutions.

R (Camelot UK Lotteries Limited) v The Gambling Commission [2012] EWHC 2391 (Admin)