Camelot UK’s High Court challenge of the Fourth National Lottery Licence Competition could cost the UK government £600m in damages – should the lawsuit deem the competition as an unfair outcome.
The operating steward of the National Lottery since its 1994 inception, Camelot refuses to accept the ruling of the UK Gambling Commission (UKGC) to award its next 10-year operating licence to Allwyn UK as the competition’s ‘preferred applicant’.
Though Camelot concedes that it will lose the next operating licence, alongside technology partner IGT Plc – £600m in damages are sought from the High Court lawsuit that claims that the UKGC’s competition process was engineered to favour an Allwyn outcome.
Should the litigation be successful, Camelot and IGT will claim damages from the UK government of £400m and £200m respectively.
The fallout of Camelot’s High Court appeal was examined by a DCMS oversight committee this week, putting questions to Chris Philp, Minister in charge of gambling policy.
Philp outlined DCMS disappointment at Camelot’s course of action: “We’re very disappointed, that Camelot are choosing to pursue this litigation. They’ve had the licence for 28 years now, which is an extremely long period of time, nearly three decades, so to litigate is disappointing.”
The Minister was questioned by Julian Knight MP (Conservative), on how the department would settle damages of £600m if such eventuality happened.
Philp responded that the potential outcome had not been discussed with the Treasury, but that his department were aware that the matter would be settled by either Treasury settlement or taking funds from good causes.
The Committee interjected, that a solution must be clarified by DCMS as MP Kevin Brennan (Labour) notified that Camelot had previously stated that the “Gambling Commission denied that any damages which could be awarded in that case would come from the National Lottery Distribution Fund and it would be a matter for the Secretary of State”.
Philp was forced to respond that “if ultimately public funds are involved then the Treasury ultimately are the custodian of public funds.”
DCMS’ gambling minister stood by the competition’s process and judgement, to appoint Allwyn as new National Lottery steward – which deemed that its bid had demonstrated the best incentives to maximise contributions for good causes.
Philp further underlined that Allwyn had put forward a much simpler process for DCMS and stakeholders to monitor their performance, profits and how funds for good causes were generated.
Knight and Brennan further questioned Philp on Camelot’s ownership by the Ontario Teachers Pension Fund and their interest to pursue the litigation, by which Camelot’s owner “had milked enough out of it already.”
Knight – chair of the select committee – probed: “They would be the ultimate beneficiaries of potentially good causes losing out to the tune of £600m. That is a very rich group of pensioners effectively taking money off British good causes… Potentially, if this case goes through.”
Philp responded: “I don’t want to comment on this court case but I would just repeat what I’ve said. I’m very disappointed that this litigation is being pursued. Camelot has had this licence for 28 years now, it’s a very very long time.
“I’ve been given every assurance by the Gambling Commission that this process was run properly and it was run fairly, they were supported by very credible professional advisors from the legal and the financial services sector as they ran the process, I don’t think that this litigation serves anyone’s interests and I am extremely disappointed that it’s happening.”