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.
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.
Camelot’s 30-year hold over the National Lottery
Holly Saul and Ben Lowther, of Cambridge, who won £1m in a EuroMillions draw
When Prime Minister John Major launched ticket sales for a new National Lottery in November 1994, he said Britain would be ‘a lot richer because of the lottery.’
‘It is in every sense the people’s lottery.’
Since then hundreds of millions of ticket stubs have been bought at shop kiosks and online, and some lucky 6,300 people have become overnight millionaires or multi-millionaires.
The lottery was a success from the start, with more than 20 million tuning in to watch the first ever draw on November 19, presented by Noel Edmonds.
The first Lotto numbers drawn were 30, 3, 5, 44, 14 and 22, the bonus was 10, and seven jackpot winners shared a prize of £5,874,778.
With a huge audience to entertain, the lottery attracted star talent to take part in draws, including the likes of comedian Bob Monkhouse, Monty Python star John Cleese and model Ulrika Jonsson.
Constant attempts to reinvent the offering for the primetime Saturday slot in the run-up to draw led 20 game shows over the years, such as Dale Winton’s In It to Win It and Brian Conley’s We’ve Got Your Number where contestants answered questions for cash prizes.
A second lottery draw, Thunderball, was introduced by Camelot on 12 June 1999.
Throughout the early 2000s and 2010s, Camelot saw off attempts to take over their licence and was renewed or extended four times until 2024. Its 28-year hold on the UK lottery has led Camelot to be described as one of the most efficient and robust lotteries in Europe, but has also meant criticism.
The excitement and novelty value of the weekly lottery draw is not what it used to be, and the game shows have not featured since 2017.
In 2018, Camelot was criticised over a falling amount of money raised for good causes, with a National Audit Office report finding that its profits had risen by 122% over seven years while returns to good causes only grew by 2%.
MPs have also criticised Camelot’s a move towards app-based games rather than traditional draws, claiming it risks worsening problem gambling and reducing the amounts given to good causes.
More recently, Camelot has responded to declining sales by launching new products, such as Euromillions, with huge rollover jackpots, and Set for Life. where players can win £10,000 a month for 30 years.
It has also sought out new markets with scratchcards and online instant win games, which give players a much greater chance of winning small amounts of cash.
These games have proved popular, but because more money is handed out in prizes, a smaller percentage of the ticket price goes to good causes.
Source: Daily Mail