The People's Lottery's marketing plan was outshone by Camelot's, according to the National Lottery Commission, which last night handed the fiercely contested licence to incumbent Camelot.
The Commission cited the People's Lottery's marketing research and overall marketing plan as being 'less convincing' than that of Camelot, particularly as its plan relied on the early introduction of new games.
But Sir Richard Branson claimed that Camelot's late decision to increase its marketing budget to pounds 90m had impressed Commission chairman Lord Burns.
The People's Lottery had promised to equal Camelot's current pounds 40m spend, but was left behind when Camelot boosted its figure when given a second chance at the licence.
Camelot, headed by chief executive Dianne Thompson, will now back the lottery with a budget that will equal that of big advertisers such as Procter & Gamble and BT.
WCRS and OMD UK will work on the advertising and media accounts, while J Walter Thompson, whose managing partner Simon Burridge is chief executive of The People's Lottery, will lose out.
The Commission added that there had been uncertainty over whether the People's Lottery 'sufficiently recognised the resources required for the management tasks involved in start-up and subsequent operation'. However, it also expressed doubts over Camelot's falling Instants sales, and its proposed Euro Bloc game.
The decision is a severe blow to Branson, who said: 'The real loser is the lottery itself, the players and the good causes they support. Camelot has been given a licence for life today.'
He added that the People's Lottery would study the issue overnight and decide whether to take legal action.