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New UK National Lottery operator Allwyn is under investigation by the Gambling Commission over alleged delays in its rollout of promised reforms, as the regulator itself faces a two-pronged legal assault over its handling of the nationwide draw.
The Gambling Commission quietly released the dramatic news that it had opened an investigation into Allwyn in its 2024/25 annual report, released last month.
The regulator devoted only one paragraph to the announcement, saying it was concerned about “delays in Allwyn achieving full implementation which was agreed under the licence would be delivered by February 2025, which Allwyn was legally committed to”.
“As a result, the Commission has initiated enforcement action, which is ongoing,” it said
Allwyn took control of the National Lottery in February 2024, on the back of bold promises about reforming the three-decade-old brand.
The Czech-owned company promised to more than double the returns to good causes delivered by previous operator Camelot, which had run the contest since its inception in 1994.
Allwyn has not returned a request for comment from Vixio GamblingCompliance to confirm what projects the alleged “delays” refer to.
A spokesperson for the Gambling Commission also declined to elaborate and said only: “We are in the formal investigation stage of the enforcement process.”
The Legal View
A UK gambling law expert shared her opinion with Vixio that potential enforcement against Allwyn could be driven both by a failure to deliver on promised reforms and a fear that the National Lottery is not being well run.
“All we know from the Gambling Commission’s annual report is that the Commission considers that Allwyn did not deliver full functionality by February 2025 as it was required to,” said Tamsin Blow, a partner at CMS law firm in London.
“The Commission is under a statutory duty to ensure that the net proceeds of the National Lottery are as great as possible. So as well as being concerned that there has been a breach of the agreed terms, the Commission may be concerned that proceeds are not being maximised,” she said.
With details of the case yet to be released, possible action taken against Allwyn remains broad.
“The Gambling Commission’s enforcement powers include direct internal audit, new or amended licence conditions, legal injunctions, financial penalties and ultimately licence revocation,” explained Blow.
Gambling Commission Under Fire
Fears from the Commission that the National Lottery’s new operator is not delivering on some of its ambitious pledges come as the regulator continues to face legal action of its own over the competition that saw Allwyn awarded the contract.
Northern & Shell, owned by billionaire Richard Desmond, lost out in its latest bid to win control of the lottery, but is now suing the Gambling Commission for £200m in damages over what it says was an unfair contest.
The commission’s new enforcement action against Allwyn is believed to be unlikely to affect the outcome of this case, even if the new lottery operator is found to be at fault.
The case is scheduled to be heard in the High Court in October.
The Gambling Commission faces a second barrage of lottery-related legal action from Northern & Shell, which runs the Health Lottery in the UK.
It alleges that a decision from the Commission in 2023 to award then-National Lottery operator Camelot £70m to spend on marketing was in violation of the Subsidy Control Act 2022.
The appeal claims that the money, which came from cash ringfenced for good causes, amounts to an illegal subsidy under English law.
Camelot had brought its own legal action against the Commission over the contest that saw it stripped of the lottery licence for the first time, but the company eventually dropped its case and was then acquired by Allwyn in February 2023.
Allwyn Updates Stumble
Meanwhile, Allwyn is continuing to enact changes to the National Lottery ecosystem.
Early August saw it deliver on a promised nationwide overhaul of lottery terminals, which it billed as the “biggest technology upgrade” for the lottery since 1994.
But store owners are reporting widespread issues with the new machines, with one of many disgruntled shop owners describing the rollout as an “utter shambles” to trade publication Better Retailing.
