Gallagher will be taking on the newly created role of director of corporate affairs after four-and-a-half years as a member of ITN's senior management team.
He is likely to work closely with commercial director Phil Smith and marketing chief Jo Kenrick on improving Camelot's image. Although he will take on some of the responsibilities of Andrew Jones, the departing public affairs chief, Gallagher will have a more senior role.
Corporate PR is a crucial department for Camelot, but in the past it has seen several casualties. Sue Slipman, head of external affairs, was made redundant in a jobs cull by the Lottery operator in September, while David Rigg, one of the Lottery's founding directors, resigned in 1997 in the wake of a scandal over 'fat-cat' pay.
Gallagher's appointment comes at a critical time for Camelot, which needs to demonstrate a revival in the Lottery's fortunes if it is to hold on to the licence when it next comes up for renewal in 2007. Last Saturday's draw saw just £39m spent on tickets, the lowest amount in the Lottery's history.
Sales for the main draw, which was relaunched earlier this year with a £72m marketing campaign featuring Billy Connolly, are widely believed to have been affected by adverse publicity about the distribution of cash designated for good causes.
The 15 distributors of Lottery cash, which include Sport England and the Arts Council, are now in discussions with Camelot and the Department for Culture, Media and Sport about the development of a co-ordinated marketing strategy to inform people how the Lottery is financing projects in their local communities.
Although Camelot has no say in how Lottery funds are handed out, grants made to groups such as the National Coalition of Anti-Deportation Campaigns prompted a media outcry and eventual government intervention.
Last week, the influential House of Commons public accounts committee said that the Lottery operator should dip into its own profits in future if the amount of cash raised for good causes falls below predicted levels.