Tuesday, December 6, 2022

UK National Lottery Could be Suspended Over Licensing Battle

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Posted on: May 23, 2022, 01:45h. 

Last updated on: May 23, 2022, 01:45h.

London’s High Court will decided in a ruling expected this week whether the UK National Lottery will be suspended in the future if a legal battle over licensing remains unresolved.

UK National Lottery
The UK National Lottery could be suspended for the first time in its 28-year history if the battle between Camelot and Allwyn drags on. (Image: The Independent)

In March, the UK Gambling Commission (UKGC) awarded the government lottery contract to Allwyn Entertainment, a subsidiary of Czech lottery giant Sazkia, after a protracted bidding process. That was at the expense of Camelot, which has operated the lottery since its inception in 1994.

Camelot has sued the UKGC, calling the award of one of the country’s most lucrative public sector gigs to Allwyn “badly wrong.” The contract is estimated to be worth £80 billion (US$108 billion) over the next decade, according to analysts.

Should the legal battle drag on, there are concerns that players who win jackpots under Camelot would be unable to claim their prizes.

‘Could Take Years’

Allwyn is set to take over the reins of the lottery from 2024. The UKGC wants to transfer the license as soon as possible to ensure its preferred applicant has time to enact a successful transition.

But once transferred, things could get messy if Camelot’s legal challenge goes beyond 2024. Legal experts have said the case could take years to resolve.

Camelot wants to put the license swap on hold, pending the resolution of the lawsuit. It claims that hundreds of millions in funds that go to good causes are being jeopardized by a theoretical future suspension.  

The UKGC claims the opposite is true.

“We are confident that we have run a fair and robust competition,” the commission said last month. “A delay to the implementation of the [next] license poses a significant risk which could diminish funds going to these causes.”

Camelot alleges the UKGC changed the rules during the final stages of its selection process.

Risk Factor

The winner was chosen based on a “scorecard” process where each bidder was marked on every aspect of their proposal to ensure fairness and, ironically, deflect lawsuits.

The regulator scored Allwyn’s bid 87.2% and Camelot’s 85.7%. But a “risk factor” discount of up to 15% was supposed to be applied to the financial projections made by each bidder. Except that it wasn’t, according to the lawsuit.

The plaintiff argues that Allwyn’s score should have been adjusted for risk because its bid projected significantly more money to good causes.

The Czech company promised to donate £38 billion (US$50 billion) of revenue to good causes in ten years. Camelot raised £45 billion (US$59 billion) in 28 years.

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