Legal battle heating up

In the coming days, Camelot Group will learn if its efforts to hold onto its UK National Lottery license have proven successful. A High Court hearing relating to the planned takeover will take place on Wednesday and Thursday this week.

Allwyn Entertainment is set to take over in February 2024

Camelot has operated the lottery since its inception 28 years ago. However, Allwyn Entertainment is set to take over in February 2024, with the UK Gambling Commission (UKGC) selecting the Czech operator as its preferred operator. The UKGC has asked High Court judges for permission to sign the ten-year license agreement.

Camelot has delayed the signing of the deal by securing a stay while the court makes its decision.?There are concerns that a long-running legal battle on the matter could have a severe impact on the money going to good causes.

In a letter to the UKGC, Camelot’s ex-boss Dame Dianne Thompson warned the shortfall could reach as much as ￡1bn ($1.23bn). She urged the UKGC to delay the takeover to prevent this. She believes the legal fallout would halve the annual ￡1.9bn ($2.3bn) that the lottery regularly dishes out to support community projects.

Fighting tooth and nail

It’s fair to say Camelot was unhappy when it learned it would lose its license to Allwyn. Commenting on the choice, Group CEO Nigel Railton said the UKGC got the decision “badly wrong.” In March, the company filed a claim in the High Court against the UKGC to try to fight the decision. The firm has also demanded an extension to its current license for up to two years while legal action takes place.?

The UKGC proposed Allywyn Entertainment as its preferred applicant in March. Billionaire Karel Komarek owns the company that already operates other lotteries across Europe, including Greece, Italy, Austria, and the Czech Republic. Other applicants in the race included Camelot, media mogul Richard Desmond, and Italy-based Sisal.?

If the court decides to remove the stay, Allwyn will commence its plans to take over as the operator of the lottery, despite ongoing legal action from Camelot. As part of the transition process, Allwyn and Camelot would need to have monthly meetings. If judges decide to maintain the stay, the license decision will remain on hold and Camelot would likely get a short-term extension to its current license while the legal battle rumbles on.

Big money at stake

The National Lottery is the UK’s largest single public sector contract. The UKGC began the application process for the fourth ever National Lottery license back in August 2020.

charging customers twice for tickets

Camelot has received criticism over recent months which evidently didn’t help its application. In March, it received a ￡3.15m ($3.9m) fine from the UKGC over numerous failures relating to its mobile app. These issues included Camelot mistakenly telling winning players they had lost and charging customers twice for tickets.

In its proposal, Allwyn promised to significantly increase the sums of money going to good causes from the lottery. It pledged to donate up to ￡38bn ($47bn) over the ten-year license period, which compares to the ￡16bn ($20bn) Camelot contributed over the past decade. Between 2012 and 2017, Camelot’s profits rose 122%, but donations to good causes only went up by 2% in the same period.