Camelot’s National Lottery legal battle could drain £1bn from good causes
Legal action could drain over £1bn from the National Lottery good causes fund as the battle over the lucrative contract comes to a head this month.
Camelot, which is owned by Ontario Teachers’ Pension Plan, has run the lottery since its inception in 1994, and has questioned the process behind the competition, calling for Allwyn’s takeover to be delayed until a full case is heard.
A key argument put forward by Camelot is that the gambling regulator did not properly evaluate the risk of Allwyn’s ambitious proposals when it awarded the licence back in March.
Camelot has accused the Gambling Commission of failing to “correctly and lawfully” evaluate the bids, stating that it “committed manifest errors”.
Allwyn, which is headed by the Czech billionaire Karel Komárek, is reported to have said it would slash ticket prices from £2 to £1 and hike the amount of money going towards good causes and UK sporting activities, forecasting £38bn for good causes during the 10-year licence.
Allwyn is due to takeover the £6.4bn contract from February 2024, and any prolonged legal action could lead to the suspension of the national lottery altogether.
According to court filings seen by the Observer, the Gambling Commission warned: “In the worst scenario, there will be a gap in service between the expiry of the third licence on 31 January 2024 and the commencement of the fourth licence.
The commission anticipates there will be an overall shortfall of payment to good causes of at least £1bn and, in the case of an interregnum, considerably more.”
The good causes pot supports everything from training Olympians to funding food banks across the country.
A Camelot spokesperson said: “This massive bill is entirely avoidable by simply waiting until after the court ruling before issuing the contract to run the national lottery.
“Good causes and the taxpayer should never have been put on the hook for hundreds of millions of pounds. Thankfully, there is still time for the regulator to change course, and we urge them to do so.”
An Allwyn spokesperson told the Observer: “Camelot will still have its day in court in the new year, in which we are confident it will be demonstrated that the Gambling Commission ran a thorough, proper and robust competition.”
Allwyn chief executive Robert Chvatal said last week in the firm’s financial results: “We look forward to the Court of Appeal hearing in September of the current operator’s appeal of the High Court’s decision to allow the license award to proceed and the formal transition period to begin.”
The hearing is expected to kick off on 13 September.