As the UK Gambling Commission decided to award the National Lottery contract to multinational Allwyn Entertainment, Camelot, which has operated the business since 1994, is expected to challenge the regulator, taking it to court on the grounds of breaking the law when it discarded Camelot’s score in the system that measures the bids, according to a report Saturday by The Telegraph.
Per the former National Lottery’s operator, Camelot had a 15% “risk factor” discount that was supposed to be applied to bidders’ financial forecasts. Camelot is expected to claim that the discount was initially applied by the regulator, but later changed to zero in the final adjudication, the prestigious UK newspaper reports.
The change in rules turned Allwyn’s projections for good causes to be higher than Camelot’s, allowing Czech billionaire and Allwyn’s boss, Karel Komarek, to get the license, but a legal battle would prevent Allwyn from signing the contract to run the National Lottery, The Telegraph reports.
An intervention by Conservative MP Julian Knight, the chairman of the House of Commons Digital, Culture, Media and Sport Committee, is likely to be scrutinized in Camelot’s legal challenge, as he wrote to the Gambling Commission warning officials that the application of a risk factor gave incumbent operator Camelot a significant advantage.
In parallel, gambling minister Chris Philp is currently seeking assurances from the Gambling Commission about Mr. Komarek’s business ties to Russian energy giant Gazprom, the Kremlin-controlled gas producer.
“I have asked the commission to assure me that it has conducted thorough inquiries to establish that the provisional licence awardee meets the test, and it has given me that assurance”, said Chris Philp. “There are also arrangements for the proposed licence holder to undergo the UK secure vetting process, and that work will begin shortly”.
Camelot will lose its license to run the UK National Lottery as the Gambling Commission named rival Allwyn Entertainment as its preferred applicant to take over earlier this month. The company, owned by the Czech group Sazka, is expected to start running the lottery business in 2024.
Camelot has been named as the reserve applicant. This means it would continue to run the lottery in the event that finalization could not be achieved with the preferred candidate in the lottery's fourth license process.