Camelot claims National Lottery loss will render business obsolete

By | May 12, 2022

Camelot’s case in the High Court continued this week, with the National Lottery operator maintaining its protests about the future direction of the contract. 

A representative for the company reportedly informed the High Court that it would ‘cease to exist’ should the next ten-year licence for the National Lottery be awarded to Czech firm Allwyn. 

Following a lengthy licence tender, the UK Gambling Commission (UKGC) concluded that pan-European lottery operator Allwyn would assume the role as National Lottery operator in February 2024.

Camelot’s concerns relate to the fact that it has been the sole steward of the National Lottery since the lottery’s inception in 1994, and so the transition of the contract to Allwyn in two years time would effectively force the former operator to cease operations.

However, as reported by the Daily Mail, Queen’s Counsel Sarah Hannaford –  who represents the UKGC – asserted that this was not a sound argument. She argued that Camelot had established itself as a Special Vehicle Company (SPV), and so the possibility of losing its sole contract was always a risk.

“The licence that it has entered into allows it only to carry out the UK National Lottery and ancillary activities if there is agreement,” she said.

“Setting yourself up as an SPV and then saying there is an existential threat simply does not work as a matter of law in my submission. Camelot UK took a decision to operate as they did and it was perfectly foreseeable that they might lose a contract.”

The barrister stated that Camelot had provided “nowhere near” cogent evidence of financial loss, whilst IGT – which supplies lottery technology to the firm and has also launched a suit – will likely suffer very little as a result of the transition.

“IGT is a massive global business and the UK lottery is frankly a very small part of it. It has a lot of fingers in a lot of lottery pies,” Hannaford added. “’There is absolutely no doubt that damages are an adequate remedy for IGT.”

Camelot’s appeal was first launched last month. At the time, Chief Executive Nigel Raliton emphasised that the UKGC had not given a “satisfactory response” as to why it rejected the bid, but the regulator has stood by its decision and processes.

The Commission stated: “The competition and our evaluation have been carried out fairly and lawfully in accordance with our statutory duties, and we are confident that a court would come to that conclusion.”

Allwyn’s victory in the tender has also received wider criticism from some political figures. Watford MP Dean Russell drew attention to employment in his consistency, where Camelot has a considerable workforce, as well as Allwyn owner Kamel Komarek’s alleged ties to Russia in the wake of the Ukraine conflict. 

The outcome of the licence tender was defended by Deputy PM Dominic Raab, who pointed to Komarek’s opposition to Vladimir Putin’s administration. He also highlighted the efforts made by the businessman to terminate his involvement in a joint venture with Russian state-backed energy firm Gazprom

Komarek, whose firm penned a joint letter with his other holding KKCG, responded to the MPs assertions with his own statement: “The sad reality is that a party in the UK wishes to use the war in Ukraine as part of a distasteful and shameful attempt to discredit Allwyn’s team and bid to operate the National Lottery. This speaks to their character, not ours or mine.”

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