Allwyn formally awarded UK National Lottery license after Camelot drops legal challenge

The UK Gambling Commission has formally awarded the fourth National Lottery License to Allwyn Entertainment UK, the regulator announced on Tuesday. The process was completed after Camelot, which has run the national lottery since it was launched in 1994, decided to drop its appeal against a legal ruling over the handover of its license to rival Allwyn.

"Today's award formally marks a fresh start for the National Lottery. We have exciting plans for this important and cherished institution, crucially raising even more proceeds for good causes across the country, improving the player experience through the latest technology and ensuring safe participation," said Allwyn's chairman Justin King. "Everyone at Allwyn is ready to meet the challenge of working under a shortened timeframe for transition."

On July 14, the Court of Appeal granted Camelot permission to appeal the High Court’s decision to lift the automatic suspension that prevented the Commission from formally awarding the license to Allwyn. As a result of this permission, the automatic suspension remained in place.

However, earlier this month, Camelot announced its decision to withdraw its appeal, leading to the suspension subsequently being lifted. Thus, the UK’s regulator has now entered into a definitive agreement with Allwyn, through which the company has been officially awarded the fourth license and can commence the transition to become the lottery’s new operator.

“Our priority is to ensure a seamless and timely transition to the next license, for the benefit of participants and good causes,” the UKGC said. “We have begun meetings between the Commission, Allwyn and Camelot as the outgoing licensee, who we are confident will honor their obligations as the current licensee to cooperate in that transition.”

According to the regulator, the Enabling Agreement that the Commission and Allwyn have now entered will assist all parties in transitioning between licenses and provide the appropriate framework for implementation.

The UK National Lottery is one of the world’s largest lotteries: since launching in 1994, its players have collectively raised more than £46 billion ($52.5 billion) for 670,000 good causes across the UK, notes the Gambling Commission.

A time of change

“Allwyn has committed to investment in the National Lottery that is expected to deliver growth and innovation across the National Lottery’s products and channels, resulting in increased contributions to good causes, subject to the protection of participants and propriety,” the UKGC said.

"Under Allwyn's stewardship, sales growth is expected to result in the money allocated to UK good causes more than doubling," the new licensee added. "The National Lottery of the future will build on a cutting-edge technology platform that will improve player protection over the next 10 years and beyond."

The new licensee's plans "will transform and improve the way the National Lottery operates," says Allwyn. In addition to utilizing technology "to protect players from gambling harm and providing new ways to play," the company intends to invest in retailers to support the recovery of high streets; and along with its partners Scientific Games and Vodafone, it will "also put emphasis on working with local SMEs throughout its operations."

"This moment signals a time for change for the National Lottery," stated Allwyn's CEO David Craven. "We must seize this moment, creating the right conditions for The National Lottery to innovate. Our primary transition objective is to responsibly boost performance leading to increased contributions to good causes."

A set of key changes will be introduced with the fourth license. These include a new incentive mechanism “that ensures the licensee’s incentives and delivery are better aligned with contributions to good causes.” Additionally, there will be a move to an outcomes-based approach, in line with best practice and the National Audit Office’s recommendations; set to give the licensee greater responsibility to fulfill its obligations.

The new licensee will be granted “greater flexibility,” allowing them to more rapidly adapt their offerings “to reflect changing technology, regulation and consumer safety and preferences.” The license is granted for a fixed 10-year period, with the intention to provide the licensee with a clear period for investment planning. The fourth license commences in February 2024.

Andrew Rhodes

“We are pleased to have officially awarded the fourth license to Allwyn following a highly successful competition and the court’s decision to lift the suspension on the award process,” stated Andrew Rhodes, Commission Chief Executive Officer. “We now look forward to working with all parties to ensure a smooth and efficient handover.”

“I am confident that Allwyn and the key changes for the fourth license will maximize returns to good causes, promote innovation, deliver against our statutory duties, and ultimately protect the unique status of the National Lottery,” he added.

A disputed license award

Global lottery operator Allwyn was voted the preferred applicant by the UK Gambling Commission to take over the lottery back in March, a move contested in a legal challenge shortly after its announcement. Camelot had suggested the regulator’s assessors flagged “implausible” revenue forecasts at Allwyn, owned by Czech billionaire Karel Komarek.

Additionally, the company accused the regulator on the grounds of breaking the law when it allegedly discarded Camelot’s score in the system that measures the bids. The current operator claims it would have been appointed had the commission not made a “manifest error.”

The claims were contested by the UK's regulator, which said it took “every step possible to ensure a level playing field for all interested parties,” and to enable it to appoint a licensee “who will run the National Lottery with integrity and ensure the National Lottery maximizes support for good causes.”

Camelot decided this month not to proceed with its legal challenges after it emerged that more than £1 billion ($1.1 billion) for good causes could be lost over its legal action if it delayed the handover of the £6.4 billion ($7.3 billion) contract, reported The Observer in early September.