Camelot drops appeal over loss of UK National Lottery to rival

The UK National Lottery operator Camelot has withdrawn its latest appeal in a legal action against the handover of the lucrative lottery contract to rival Allwyn, removing a key obstacle to the change of operator.

The Gambling Commission said on Monday that Camelot had said it would withdraw its challenge to an earlier court ruling and that the company would seek only damages rather than a suspension of the licensing process, which has been hotly contested.

The regulator added, however, that Camelot’s technology provider IGT, which was also appealing against the ruling, had not withdrawn its appeal. This means the handover remains suspended for now.

“We are not aware that IGT’s position has changed and therefore the IGT appeal and the suspension will continue until that is resolved,” said the regulator. “Resolution of the appeal would allow us to proceed with the important work of formally awarding the licence to Allwyn.”

Camelot, which is owned by a Canadian pension fund and has run the lottery since its inception 28 years ago, had been seeking to appeal against a court decision to lift a suspension of the handover process.

This was part of its legal case against the naming in March of Czech-owned Allwyn as the preferred applicant for the lottery licence.

Estimates suggest that the 10-year licence, which is due to start in 2024 and is one of the most valuable UK government contracts, will be worth between £80bn and £100bn in sales. But the legal wrangling has prompted fears that the lottery’s operations could be paused for the first time ever.

Allwyn is Europe’s largest operator, with businesses in the Czech Republic, Italy and Greece, and is controlled by the Czech billionaire Karel Komárek. It has promised to halve lottery ticket prices to £1 while doubling the sums allocated to good causes and investing in new digital products.

The company said it had agreed to waive all claims for costs and damages against Camelot, adding that it was “excited at the prospect of becoming the custodian of Europe’s biggest lottery”.

Camelot said it “will now co-operate with Allwyn and the Gambling Commission to facilitate an orderly transition to the fourth [National Lottery] licence”, but added that it would still fight its legal action for damages.

Camelot said: “By pursuing the opportunity to be awarded the fourth licence, Camelot has sought to limit the risk that good causes or the Exchequer would have to meet damages if the licence award was found by a court to have been unlawful.

“However, it has become clear that the potential damages covered by the undertakings needed for the appeal to proceed would have been too large, and involved too great a commercial risk, for it to be reasonable to provide them.”

The company had earlier argued that the Gambling Commission should not have discounted a “risk factor” score assigned to the lottery bids, as it favoured the more ambitious but potentially risky business plan set out by Allwyn.

The regulator said: “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.”

IGT did not immediately respond to a request for comment.