Camelot loses legal bid to stop UK lottery licence handover to Allwyn

Outgoing UK National Lottery operator Camelot has lost its legal bid to stop the handover of a new licence to rival Allwyn, in effect ending the group’s hopes of having the decision overturned.

Mrs Justice Finola O’Farrell ruled on Wednesday that an automatic suspension put in place after Camelot challenged the Gambling Commission’s decision to award Allwyn the 10-year licence should be lifted. The new licence is due to commence in 2024.

The judgment caps the most hotly contested battle over the National Lottery’s licence in its 28-year history, during which the incumbent Camelot was deposed as the chosen operator despite having run the lottery since its inception.

Estimates suggest that the 10-year licence — one of the most valuable UK government procurement contracts — will be worth between £80bn and £100bn in sales.

Allwyn, which is Europe’s largest lottery operator with operations spanning the Czech Republic, Italy and Greece, won the bid after pledging to halve ticket prices to £1, double the amount of money generated for good causes and invest heavily in new digital products.

Allwyn assembled a roster of City grandees to lead its bid team, including Sir Keith Mills, inventor of the Air Miles loyalty card scheme, and Justin King, former chief of supermarket J Sainsbury. But the Czech-owned company, which changed its name from Sazka during the bid process, has been criticised for its chair Karel Komarek’s ties to the Kremlin through a joint venture with Russian state-owned oil group Gazprom.

O’Farrell concluded that the public interest was “a strong factor in favour of lifting the suspension” and that “maintaining the suspension until resolution of the dispute will cause delay to the fourth licence”.

“In turn, this will cause delay to the benefits of the fourth licence, giving rise to reduced contributions to the good causes and delayed introduction of the enhanced game portfolio and new technologies,” she said.

She added that “delayed funding to social programmes and other good causes is likely to give rise to real loss; late support for a food bank risks families going hungry in the meantime; delayed funding for a children’s centre deprives those who currently need it from any benefit; funding for the 2012 Olympic hopefuls after the games would have been of little assistance”.

Camelot is expected to pursue financial damages worth up to £500mn from the Gambling Commission in a trial that could take place as early as October. Its technology supplier IGT is also set to bring a case against the regulator.

Camelot argues that the regulator should not have discounted a “risk factor” score to the bids, as it favoured the more ambitious but potentially risky business plan of Allwyn. “We will take some time to consider our next steps and continue to believe that we have a very strong legal case,” the company said.

The Gambling Commission said it would “begin the important work of formally awarding the licence to Allwyn” and “our priority is to continue to work to implement our decision and ensure a seamless and timely transition to the next licence, for the benefit of participants and good causes”.

The commission said it would also prepare for a full trial over financial damages relating to the procurement process. “We remain resolute that we have run a fair and robust competition, and that our evaluation has been carried out fairly and lawfully in accordance with our statutory duties,” it added.