Judge Lifts UK National Lottery Stay, Battle Shifts To Damages

June 30, 2022
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A High Court judge has lifted a stay on the transition of the UK’s National Lottery franchise from Camelot Group to Allwyn Entertainment, a move which will allow Allwyn to begin preparing to take over one of the world’s largest lotteries.

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UPDATED: Includes additional detail and analysis from original report on June 29.

A High Court judge has lifted a stay on the transition of the UK’s National Lottery franchise from Camelot Group to Allwyn Entertainment, a move which will allow Allwyn to begin preparing to take over one of the world’s largest lotteries.

The ruling allows the Gambling Commission to start the formal process of awarding the lottery to Allwyn, and may mean the remaining issues are simply to decide whether Camelot should be awarded damages.

The commission said it had asked the court to lift the automatic stay on proceedings issued when Camelot disputed the results of its bidding process.

“We made clear that disrupting the implementation of Allwyn’s plans would present potentially severe consequences for the National Lottery and good causes” a spokesperson for the regulator said in a statement on Wednesday (June 29) following the ruling. “It also risked the National Lottery not operating to its full potential at the start of the fourth licence.”

Camelot reacted severely to the March 15 announcement that Allwyn was the preferred bidder for the next National Lottery contract, which starts in 2024. Camelot has run the lottery since its inception in 1994.

Its lawsuit claims that the commission did not follow its own procedures in giving Allwyn the nod.

The Gambling Commission said its top priority was a “seamless and timely transition to the next licence, for the benefit of participants and good causes”.

A trial over Camelot’s claims that the Gambling Commission did not follow its own procedures in granting Allwyn preference is expected later this year.

“We remain resolute that we have run a fair and robust competition, and that our evaluation has been carried out fairly and lawfully in accordance with our statutory duties,” the commission’s spokesperson said.

Justice Finola O’Farrell concluded that the public interest was “a strong factor in favour of lifting the suspension” and that “maintaining the suspension until resolution of the dispute will cause delay to the fourth licence”.

“In turn, this will cause delay to the benefits of the fourth licence, giving rise to reduced contributions to the good causes and delayed introduction of the enhanced game portfolio and new technologies,” she said.

She added that “delayed funding to social programmes and other good causes is likely to give rise to real loss; late support for a food bank risks families going hungry in the meantime; delayed funding for a children’s centre deprives those who currently need it from any benefit; funding for the 2012 Olympic hopefuls after the games would have been of little assistance”.

Camelot chief executive Nigel Railton told The Times newspaper that the commission got the call on licensing “badly wrong”.

A Camelot spokesperson reacting to the ruling said “while disappointing, this judgment only addresses whether or not the enabling agreement can be signed while our case is heard”, as a judgment on whether the regulator lawfully awarded preferred applicant status to Allwyn will be dealt with separately.

“We will take some time to consider our next steps and continue to believe that we have a very strong legal case,” the spokesperson said. “In the meantime, we remain dedicated to maximising returns to good causes, building on our record performance over the past two years.”

The commission said it cannot make any further comment until the litigation is finished.

Allwyn, formerly known as Sazka Group, owns lotteries and gambling operations in Greece, Cyprus, Austria, Italy and the Czech Republic.

In a statement welcoming the ruling, Allwyn said it promised “a transformation programme that brings an enhanced games portfolio, new technologies, provisions for safer play, and a substantial increase in returns to good causes”.

“Mrs. Justice O’Farrell was clear that the public interest, and in particular the impact on good causes was a strong factor in her judgment,” the company said.

Earlier this week, Camelot reported that sales dropped 3 percent to £8.1bn in the year ended March among signs that players have “tightened their belts” as inflation rises.

Most of the decline was due to a 7 percent drop in sales of instant products to £3.44bn.

The company said the drop was due in part to controls meant to keep at-risk players from spending money they cannot afford.

Camelot generated £1.9bn for charitable and non-profit groups in the period, up 1.3 percent over the previous year.

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