UK National Lottery contract battle could bleed ‘£1billion for good causes’
Posted: May 9, 2022, 2:03 a.m.
Last update: May 9, 2022, 2:03 a.m.
The UK Gambling Commission has been asked to delay the transfer of the UK National Lottery license from current operator Camelot to winning bidder Allwyn Entertainment. This is to avoid emptying the lottery coffers of up to £1billion ($1.2billion) in funds which should go to good causes, according to the former Camelot boss.
Dame Dianne Thompson wrote in a letter to the UKGC that the legal battle over the lucrative contract could become messy and costly if the regulator transfers the license to Allyn as soon as possible.
Once made, the transition would be costly to reverse if ultimately overturned by the courts, she claimed. Camelot’s contract is due to expire in February 2024.
“I fully understand the Commission’s enthusiasm to ensure their preferred candidate has as much time as possible to successfully transition,” wrote Thompson, who served as CEO of Camelot from 2000 to 2014.
“Transition is a complex and risky process – as I know all too well – that clearly will not benefit from a truncated timeline. I’m also sure that no one – let alone the Gambling Commission – would want to risk taking up to £1 billion for good causes, especially during a cost of living crisis.
But the regulator said in a statement that the reverse is true.
We are confident that we staged a fair and robust competition,” the commission said. “A delay in the implementation of the [next] licensing poses a significant risk that could decrease funding for these causes.
The UKGC awarded the lottery gig, one of the UK’s most lucrative public sector contracts, to Allwyn in March. This was after a long and top-secret bidding process. The contract is estimated to be worth £80 billion ($100 billion) over the next decade.
UKGC “changed the rules”
Allwyn is a British subsidiary of the Czech lottery giant, Sazka. Camelot has operated the UK National Lottery since its inception in 1994. The latter company, along with its software provider, IGT, and another losing bidder, Northern & Shell, each sued the UKGC to challenge the decision.
Their arguments focus on the allegation that the regulator “changed the rules” towards the end of the process.
A “risk factor” discount of up to 15% was to be applied to the financial projections made by each bidder. But The Telegraph reports that this was mysteriously deleted in the final rating.
The IGT lawsuit reveals that Allwyn won 87.2% and Camelot 85.7% in the bidding process. Most importantly, Allwyn planned higher incomes and pledged to donate significantly more money to worthy causes.
Had the risk factor been applied, Camelot would have won, the plaintiffs argue.
A first hearing for the case is due to take place this week.