National Lottery operator Camelot has been defeated in its legal action against the Gambling Commission, which approved The Health Lottery's license to operate in the UK.

According to Camelot, a loophole in the Gambling Act 2005 has allowed The Health Lottery to "position itself as a direct rival to the National Lottery" and has labelled the High Court decision as "legally-flawed".

The National Lottery operator has confirmed its intention to appeal the ruling and said the case had underlined the need for government intervention in dealing with the current loophole.

Camelot CEO Dianne Thompson said: "The longer the period of political inaction, the more incentive there is for other commercial operators to establish similar mass-market lotteries that would effectively cannibalise National Lottery sales and returns to the good causes."

A Gambling Commission spokesperson added: "The court has supported both the Commission's interpretation of the law and its approach to the compliance of The Health Lottery and its constituent parts."

The Health Lottery describes itself as 51 local society lotteries representing one or more local authority areas across the UK and generating funding for health-related good causes.

Click here for Camelot's reaction to the High Court decision and click here for the Gambling Commission's response.

Click here for more information about The Health Lottery.