Camelot Drops National Lottery Appeal
Author:
Jacob McKenzie
Outgoing National Lottery operator Camelot has dropped a legal challenge preventing the handover of the upcoming license to competition winner Allwyn. The decision means that the Gambling Commission is one step closer to being able to proceed with handing over the license to its preferred candidate, European lottery giant Allwyn.
The National Lottery is the UK’s biggest public sector contract. ?Alejandro Garay/Pixabay
Suspension Appeal Dropped
National Lottery operator Camelot has decided to drop its legal challenge against the Gambling Commission over its decision to award the upcoming license to rival operator Allwyn. Publishing a statement on the update, the regulator added that Camelot will still be pursuing its claim for damages.
Camelot has retained control of the lucrative license for nearly thirty years, since the National Lottery was first launched in 1994. It fought off its rivals for three license periods, and many expected that this year’s competition would prove to be the same. However, the competition for the fourth license was closer than ever before.
In a dramatic turn of events, the Gambling Commission named European lottery giant Allwyn as its preferred applicant for the fourth National Lottery license on March 15th. Since then, all three parties have been embroiled in legal proceedings, stopping the process of the license handover in its tracks.
In June, the High Court granted the gambling regulator’s request to proceed with awarding the upcoming license to its chosen candidate, Allwyn. The Commission had raised concerns that a delay in the handover of the license could negatively impact payments to good causes and could even result in the National Lottery having to pause its operations.
Camelot refuted that claim, asserting that awarding the license to Allwyn could deprive the lottery’s good causes of up to ￡800 million. On July 14th, the Court of Appeal gave Camelot and its technology provider IGT permission to appeal the High Court’s decision to lift the automatic suspension preventing the license from being awarded to Allwyn. As a result, the suspension remained in place.
Camelot has now stated that the potential damages covered by the undertaking needed for the appeal to proceed would have been too large and involved to much commercial risk. While it is dropping its appeal, Camelot will still press ahead with its main legal claim.
Legal Challenges Continue
A trial is expected to go ahead in January or February of next year, in which Camelot is likely to sue the Gambling Commission to the tune of around ￡500 million in damages. The incumbent license holder has alleged that the competition carried out by the regulator was unfair and that rules were changed in Allwyn’s favor.
In one aspect of the application process, bidders were required to provide financial projections showing how they would operate the National Lottery. Initially, applicants were told that a risk factor discount of 15% would be applied to their projections.
In its final decision, the regulator decided to revise this figure down to zero. As a result, Allwyn’s ambitious projections came out on top, as it estimated that it could raise ￡38 billion for good causes. Camelot’s projections amounted to millions less.
Now that Camelot has signaled its intention to withdraw its appeal, the Gambling Commission is one step closer to proceeding with its work to formally hand over the license to Allwyn. The regulator stated that is currently unaware of whether IGT’s position has changed and that this will need to be resolved before the suspension can be lifted.
In its statement, the Gambling Commission continued, stating that its priority is to ensure a seamless and timely transition to the next license, for the benefit of the lottery’s participants and good causes. It reiterated its stance that it has run a fair and robust competition, and that it reached its decision fairly and lawfully.
The regulator’s favored applicant, Allwyn, responded positively to the news. Commenting on the matter via a press release, Allwyn stated that it has agreed to waive all claims for costs or damages against Camelot. It welcomed Camelot’s decision, adding that it looks forward to cooperating with it and the Commission on the transition process.
European Lottery Giant
Once the process is completed, Allwyn will be the custodian of Europe’s biggest lottery. The ￡6.4 billion contract is the UK’s largest public sector contract, and it has been projected that the ten-year license could generate between ￡80 billion and ￡100 billion in ticket sales.
Allwyn is due to take over the contract in February 2024, but time is running out to carry out the transition. The Gambling Commission has previously stated that it requires at least two years to complete the process, prompting fears that the lottery could be paused for the first time ever.
Allwyn describes itself as a leading global lottery operator. Led by Czech billionaire Karel Komárek, the company maintains top market positions across Europe, in Austria, the Czech Republic, Greece, Cyprus and Italy. It boasts a market of more than 79 million adults, and annual sales are recorded at over €16 billion.
Owing to the scale of its operations, Allwyn contributes to national and local economies significantly through its taxes. It returns more than €2 billion to governments in taxes and lottery duties. The operator also works to support communities by financing a range of good causes, across health, sports, arts and community sectors.
As part of its outline for a modernized National Lottery, it has promised to halve the cost of tickets to ￡1 while doubling sums allocated to good causes and investing in digital products. Its bid to run the National Lottery was led by Sir Keith Mills, who notably helped to secure London as the host country of the 2012 Summer Olympics. At the time that it was announced that Allwyn had won the competition, Sir Mills stated:
“The National Lottery is a national treasure and we are honored to have been chosen as its future custodian. With the Gambling Commission having put its trust in us, we can immediately start to enact our exciting plans to deliver The National Lottery back to the heart of our country.”
