Camelot Drops Legal Fight Against Allwyn, Loses UK Lottery

Posted on: September 7, 2022, 06:44h. 

Last updated on: September 8, 2022, 09:52h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Long-standing UK National Lottery operator Camelot has dropped a legal bid to prevent the handover of its license to Allwyn.

UK lottery
The UK National Lottery has been operated by Camelot since its first draw, presented by Noel Edmonds in 1994, pictured above. But the operator has conceded defeat, meaning Allwyn will take up the mantle. (Image: BBC/Camelot Group)

The development means Allwyn will inherit one of the UK’s biggest public sector contracts from Camelot. That company has run the show since the lottery’s inception in 1994 and retained the license twice.

Allwyn, a subsidiary of Czech lottery giant Sazka, was awarded the gig by the UK Gambling Commission in March after a protracted bidding process. But Camelot cried foul and sued. The company claimed the process was flawed, and the UKGC changed the rules at the final stages of the competition.

The commission said the process had been “fair and robust.”

The lawsuit forced a temporary suspension of the license transition, which the UKGC applied to the High Court to overturn. The regulator claimed disruption to the transition could result in good causes missing out on up to ￡1 billion (US$1.25 billion).

Risky Business

In June, the High Court backed the UKGC and lifted the suspension. Camelot appealed but chose to drop the claim on Tuesday.

The operator said that a counterclaim filed by Allwyn that seeks damages from Camelot in the event of a disruption to the license handover “involved too great a commercial risk … for it to be reasonable” to proceed.

The UK National Lottery contract is estimated to be worth ￡80 billion (US$92 billion) over the next ten years.

Since 2010, the Ontario Teachers’ Pension Plan has been owned by Camelot, which is risk-averse. But the company will still pursue a claim against the UKGC. A trial is scheduled for January in which Camelot is expected to sue the regulator for an estimated ￡500 million (US$576 million) in damages.

Camelot Promises Cooperation

Its lawyers are expected to argue that a “risk factor” discount of up to 15% that should have been applied when the UKGC scored the bids was scrapped for the final results.

Camelot claims its business plan scored higher than Allwyn’s on almost every measure. But Allwyn pledged to give more money to good causes, a strategy that could be more greatly affected by risk.

In the meantime, Camelot “will now cooperate with Allwyn and the Gambling Commission to facilitate an orderly transition to the fourth license,” the company said in a statement.

Allwyn said in its own statement on Tuesday that it welcomed Camelot’s decision and has agreed to waive all claims for costs and damages against the group.

The Czech company will officially take over Camelot’s operations in February 2024. But a long transition period is necessary because of the scale and complexities involved.