Camelot Loses UK National Lottery in London’s High Court

Posted on: June 30, 2022, 06:22h. 

Last updated on: June 30, 2022, 10:36h.

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

Longtime UK National Lottery operator Camelot has lost its bid to overturn a decision to award Britain’s biggest public contract to a new company.

Camelot
London’s Royal Courts of Justice, which houses the High Court. Camelot will pursue a claim of damages against the UKGC for an estimated £500 million. (Image: Madden and Finucane)

Mrs Justice Finolla O’Farrel ruled Wednesday that the UK Gambling Commission can sign the ten-year, $80 billion (US$97 billion) contract with Allwyn Entertainment, the British arm of Czech lottery giant Sazka.

The gambling commission awarded the gig to Allwyn in March following a protracted bidding process. Camelot has operated the National Lottery uninterrupted since its inception in 1994.

In April, Camelot sued the regulator, claiming the decision was “badly wrong.” The lawsuit forced a temporary suspension of the license transition, now removed by the judge.

£500M Damages Claim

This all but nixes Camelot’s hopes of reversing the decision. But the operator can still pursue a claim that the process was unjust in the hope of a jackpot of £500 million (US$606 million) in damages. A trial to settle the matter has been scheduled for October.

Camelot claims that the UKGC moved the goalposts in the final weeks of the process.

A “risk factor” discount of up to 15% was supposed to be applied to the financial projections made by each bidder, according to The Telegraph. This discount was factored in to each bid at an earlier stage, only to be removed for the final adjudication.

The Czech operator’s claim that it would raise £38 billion (US$46 billion) for good causes was a far greater amount than Camelot had projected, and it’s probably what swung the decision in its favor.

Allwyn’s bid scored 87.2% and Camelot’s 85.7%. Both scored a “risk factor” of zero, despite arguably a greater degree of risk inherent in Allwyn’s projections.

Allwyn’s successful bid largely came as a surprise, not least to the company itself. It filed a pre-emptive legal challenge just days before the UKGC announcement.

‘Severe Consequences’

Praising Wednesday’s decision, the UKGC said that disrupting the implementation of Allwyn’s plans would have had “severe consequences” for the lottery and the good causes it funds.

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

We will … now be preparing for trial of the various claims,” said the UKGC in a statement. “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.

“We have taken every step possible to ensure a level playing field for all interested parties, to enable us to appoint a licensee who will engage and protect players, run the National Lottery with integrity, and ensure the National Lottery maximizes support for good causes and its contribution to society through further innovation and investment,” it added.