Camelot has dropped its appeal against a legal ruling over the handover of its licence to operate the UK’s national lottery to its rival Allwyn.
Camelot, which has run the national lottery since it was launched in 1994, said it had withdrawn its legal challenge that would have resulted in it going to the court of appeal next week. It added that it would “now cooperate with Allwyn and the Gambling Commission to facilitate an orderly transition to the fourth licence”.
This means that Allwyn, owned by the billionaire Czech entrepreneur Karel Komárek, who made his fortune in sectors including oil and gas, moves a step closer to running the lottery from February 2024.
Camelot decided not to proceed with the appeal after it emerged that more than £1bn for good causes could be lost over its legal action if it delayed the handover of the £6.4bn contract, as reported by the Observer.
The Gambling Commission had warned in a legal submission obtained by the Observer that there would be an “overall shortfall of payment to good causes of at least £1bn and, in the case of an interregnum, considerably more”.
A Camelot spokesperson said on Tuesday: “By pursuing the opportunity to be awarded the fourth licence, Camelot has sought to limit the risk that good causes or the exchequer would have to meet damages if the licence award was found by a court to have been unlawful.
“However, it has become clear that the potential damages covered by the undertakings needed for the appeal to proceed would have been too large, and involved too great a commercial risk, for it to be reasonable to provide them.
“For that reason, Camelot has decided to withdraw its appeal in relation to the lifting of the suspension and Allwyn has agreed not to pursue any damages against Camelot in relation to the undertakings given in July. Camelot is no longer seeking to prevent the enabling agreement being signed prior to the procurement trial, which will now take place in January/February.”
In late June, the high court agreed to lift the suspension preventing it from beginning the licence transfer, but Camelot appealed against this.
However, the Gambling Commission noted that Camelot’s technology partner IGT had not changed its position on the appeal. “We are not aware that IGT’s position has changed and therefore the IGT appeal and the suspension will continue until that is resolved. Resolution of the appeal would allow us to proceed with the important work of formally awarding the licence to Allwyn.”
The Guardian has contacted IGT for comment.
Allwyn said on Monday night that it had dropped its counter-claim against Camelot for damages due to delaying the transfer of the contract, in return for Camelot dropping its appeal. “Allwyn is excited at the prospect of becoming the custodian of Europe’s biggest lottery,” the company said.
The controversy, the biggest in the lottery’s history, has threatened the handover of the contract, and could have resulted in the lottery being suspended for the first time, with fears over the impact on good causes.
Camelot is still pursuing its legal claim against the Gambling Commission’s decision to award the lottery licence to Allwyn. It has accused the regulator of getting the decision “badly wrong”, and expects the procurement trial to be held in January or February. Camelot and IGT are expected to sue the regulator for damages of £400m and £200m respectively, should they succeed.
The Gambling Commission announced in March that it had picked Allwyn, Europe’s largest lottery operator, which runs lotteries in Austria, Italy and Greece, for the next licence, ditching Camelot after nearly three decades. Camelot began legal action a month later.
