Camelot defeated in National Lottery licence bid battle as UKGC picks Allwyn
UK regulator sides with Czech-owned operator amid ongoing concerns about returns to good causes
The UK National Lottery is set to enter new management after the UK Gambling Commission (UKGC) named Allwyn as its preferred bidder.
Camelot, which has run the lottery since its inception in 1994, has been named as the second choice applicant and could potentially be set for a return if Allwyn does not pass the final stages of the process.
The long-running saga, which saw the competition for the fourth licence launched in August 2020, has been beset by setbacks but has now finally reached a conclusion which will see a new licence holder for the first time in 30 years.
In its successful bid, Allwyn won out against incumbent licence holders Camelot, the Flutter Entertainment-owned Sisal and The New Lottery Company Ltd.
In February, the UKGC dismissed media reports linking Camelot with a continued operation of the licence as being based on “false and inaccurate information”.
Owned by Czech billionaire Karel Komárek, Allwyn has pledged to donate £38bn over the next decade to good causes as part of its bid. This is almost equivalent to the £45bn that Camelot raised since it began running the National Lottery in 1994.
Allwyn has also proposed reducing the cost of a lottery ticket from £2 to £1 and having two draws on one night.
Allwyn will take over the operation of the UK National Lottery from February 2024.
Allwyn’s advisory board includes the former Sainsbury’s CEO Justin King and the venture capital entrepreneur Brent Hoberman, and it is currently working with Vodafone on the technology powering its bid.
King will take over as the chairman of the Allwyn UK business now that the lottery bid has been successful.
The chairman of Allwyn’s bid, Sir Keith Mills, was instrumental in the London 2012 Olympics bid. He recently penned an open letter to the UKGC outlining why the regulator should ditch Camelot in the licensing decision.
Last November, Olympic gold medallist Adam Peaty criticised Camelot for only giving 2% of the revenue of the National Lottery to good causes.
Camelot was also accused last year of taking the credit for the National Lottery’s returns for good causes.
In February, Flutter made a last-ditch attempt to force its way into the licence reckoning following its £2bn takeover of current Italian lottery concession holder Sisal.
In a jointly penned letter to the UKGC, Flutter CEO Peter Jackson and Sisal CEO Francesco Durante argued that the licence should go to a UK-listed company and not be taken under foreign management, overtures which were rebuffed by the regulator.
In a statement, Andrew Rhodes, UKGC chief executive, said: “Our priority was to run a competition that would attract a strong field of candidates. Having received the most applications since 1994, it is clear that we’ve achieved just that.
“I am confident that the success of the competition will lead to a highly successful fourth licence – one that maximises returns to good causes, promotes innovation, delivers against our statutory duties, and which ultimately protects the unique status of the National Lottery.”
In response, King commented: “I’m delighted that Allwyn’s proposal has been deemed the strongest to grow good causes in the safest and most sustainable way possible.
“The Gambling Commission has run a lengthy and detailed process, and I’ve been extremely impressed by the attention they have paid to the challenges facing the National Lottery over the coming decades.”
“The National Lottery is a vital British institution and we’re focused on ensuring it plays an even bigger part in society by increasing participation, improving safeguards and giving back more to good causes.”
The UKGC also highlighted some key changes to the fourth licence citing the need to ensure the National Lottery “remains relevant to all of society, and continues to bring significant returns to good causes”.
Changes will include a fixed 10-year licence allowing the licence holder a clear period for planning and investing, as well as a new retail charter to ensure licence holders engage with the retail industry moving forwards.
Licence holders will also be afforded greater flexibility to reflect future changes in technology, regulation and customer preferences.
A new incentive mechanism will be put in place to bring profits closer in line with returns to good causes and, finally, a move to an outcomes-based approach to give the licence holder greater responsibility to fulfil its obligations.