Camelot Disputes Award of UK National Lottery
Legal row over the National Lottery 'could cost £1billion in funds set aside for good causes', warns its ex-boss
Dame Dianne Thompson told the Gambling Commission to delay licence switch
Last year the National Lottery gave £1.88 billion to good causes across the UK
Leaving the Lottery worse off during cost of living crisis is unwise: Dame Dianne
Camelot expressed shock when it lost the Lottery licence after over 30 years
By NEIL CRAVEN AND LUKE BARR FOR THE MAIL ON SUNDAY
PUBLISHED: 20:44 EDT, 7 May 2022 | UPDATED: 20:44 EDT, 7 May 2022
A legal row over the National Lottery could blow a £1billion hole in funds set aside for good causes, according to its former boss.
Dame Dianne Thompson has told the Gambling Commission to delay transferring the licence to new operator Allwyn to avoid the fiasco.
Such a sum would be a significant drain on the fund, which last year revealed that it had distributed £1.88 billion to good causes, such as community, arts and sports projects among a range of others.
The heavyweight intervention emerges as the commission heads for court with the current holder of the licence, Camelot, in October.
The intervention comes as the Gambling Commission prepares to meet Camelot in court.
Dame Dianne said the commission should wait until the case is concluded before going ahead with the transfer.
Camelot reacted with shock to the news in March that control of the lottery has been removed after nearly three decades. It has held the licence since the launch in 1994. The new operator is backed by Czech billionaire Karel Komarek and also operates lotteries in Austria, Italy, Greece, and Cyprus. Camelot boss Nigel Railton said the commission had got the decision ‘badly wrong’ and that he had ‘no choice’ but to take the matter to court.
Dame Dianne was Camelot chief executive from 2000 to 2014. She expressed her concern in a letter to the commission, seen by The Mail on Sunday. Potential damages, which she said would end up being drawn from the fund, could equate to up to a decade’s worth of Camelot’s profits – the equivalent to the full-term of the next licence.
Camelot is understood to want to regain control of the lottery by overturning the decision in court, rather than recoup its potential losses. A judge is expected to ultimately decide whether damages are appropriate.
But Dame Dianne said transferring the licence before the outcome of legal proceedings would hamper any chance of reconsidering the decision. ‘No one – least of all the Gambling Commission – would wish to risk taking up to one billion pounds from good causes, particularly during a cost of living crisis,’ she said.
The Gambling Commission said: ‘We are confident that we have run a fair and robust competition. A delay to the implementation of the [next] licence poses a significant risk which could diminish funds going to these causes.’
Camelot will cease to exist it tells High Court in last-ditch attempt to hold on to 28-year UK National Lottery licence that billionaire Czech tycoon's company Allwyn is poised to take
Lottery firm Camelot argues it will cease trading if it loses lottery bidding rights
The Canadian-owned firm is trying to overturn government regulator's decision
Gambling Commission gave 4th national lottery licence to Camelot rival Allwyn
Camelot is now challenging the regulator's licencing decision in the High Court
Published by Daily Mail
By STEWART CARR FOR MAILONLINE
PUBLISHED: 12:47 EDT, 11 May 2022 | UPDATED: 17:57 EDT, 11 May 2022
Lottery company Camelot claim they will cease to exist if the right to stage the draw is handed to Czech-owned newcomer Allwyn Entertainment, the High Court heard.
The Gambling Commission gave the fourth national lottery licence to Allwyn earlier this year as the 'preferred bidder', triggering a legal challenge from Camelot UK Ltd.
The regulator insists Allwyn should be issued with the licence after it won the National Lottery licence competition in August 2020.
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The regulator is applying to 'lift the automatic suspension' preventing the final award to Allwyn at a two day 'balance of convenience' hearing.
The National Lottery has been operated by Camelot Group since the first draw in November 1994, however the Gambling Commission has gone to High Court so Allwyn Entertainment can sign a 10-year licence to run the lottery
If the ban is lifted Allwyn can go ahead with its plan to take over the lottery by February 2024.
Formerly known as Sazka, Europe's largest operator has fended off three competitors to operate the draw after battling with the Canadian owned Camelot, Italy's Sisal and media tycoon Richard Desmond.
The company currently operates lotteries in the Czech Republic, Austria, Italy, Greece and Cyprus.
Sarah Hannaford, QC, representing the Gambling Commission, said Camelot UK was a Special Vehicle Company (SPV) set up solely to run the UK National Lottery in 1994.
'The licence that it has entered into allows it only to carry out the UK National Lottery and ancillary activities if there is agreement,' the barrister said.
Ms Hannaford argued that losing procurement, as Camelot UK has, is a 'hazard' of contracting with a public body such as the Gambling Commission.
'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.'
She said the 'only legal loss' to the current licence holder was a loss of profit and damages were 'clearly' a sufficient remedy to that loss.
Hertfordshire-based Camelot (headquarters above) filed a High Court claim against the Gambling Commission in March, in an effort to retain its UK bidding rights
Formerly known as Sazka, Allwyn is Europe's largest operator and has fended off three competitors to operate the UK lottery draw after battling with the Canadian-owned Camelot, Italy's Sisal and media tycoon Richard Desmond.
Two other companies have issued claims against the Gambling Commission - Camelot Global, a group Camelot UK belongs to, and IGT, who provides the lottery tech to Camelot.
They were both sub-contractors of Camelot UK in relation to the National Lottery licence.
Both companies have allegedly claimed that they suffered or will suffer loss as a result of Camelot UK losing the UK National Lottery licence.
'Camelot Global gets nowhere near providing cogent evidence of financial loss,' Ms Hannaford said.
'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.
'There is absolutely no doubt that damages are an adequate remedy for IGT.'
The fourth National Lottery licence period begins in February 2024.
Camelot would also have to actively assist the transition to Allwyn as the operator of the fourth licence.
The Watford-based company would be expected to sue the regulator for an estimated £500m in damages - money which might have to come from the lottery's pot for good causes.
If the stay is not lifted, the transition to the fourth licence will remain paused as the case proceeds through the courts.
This would force the government into extending the third licence and could require legislation as transition would simply not be possible in the designated time frame.
It would also see Camelot rake in profits for an extended period of time while the future of the lottery remains in limbo.
A Gambling Commission spokesperson said: 'We are confident that we have run a fair and robust competition.
'The lottery is a national treasure and since launching in 1994 players have collectively raised more than £45bn for 660,000 good causes across the UK, transforming lives and contributing to the arts, sport, heritage and communities.
'A delay to the implementation of the fourth licence poses a significant risk which could diminish funds going to these causes.'
The hearing continues.