A legal battle could stop the National Lottery for the first time in 30 years, depriving the good causes and players of millions of pounds, the regulator has warned.
In court hearings seen by The Telegraph, the Gambling Commission said a Camelot legal challenge to the loss of the lottery license could delay delivery to rival Allwyn on February 1, 2024.
As evidence in the High Court, John Tanner, the Commission’s executive director, warned that it could cause Czech operator Allwyn not to have sufficient “implementation” time, which will lead to a “real risk” a period in which the National Lottery does. ” they don’t work at all “.
The Commission is trying to overturn a court decision to suspend the surrender process pending the outcome of Camelot’s legal challenge after Allwyn was named preferred applicant for the fourth license in March.
Camelot, the lottery operator since its inception in 1994, has claimed that the Commission made its “wrongly wrong” decision and warned in its court communications that it will effectively leave the company out of business. will prevent you from bidding for other contracts internationally.
However, the Commission warned that Allwyn needed at least 19 months to prepare and complete the complex process of taking over the lottery operation, the first transfer from one company to another in its 30 years. history. This would require it to start in June or July at the latest.
In his presentation, Mr. Tanner said that as long as the Commission was prevented from entering into an “authorization agreement” with Allwyn to begin the transfer process “unprecedented and unproven”, there was a serious risk of the lottery being disrupted.
He said: “Although the Commission is prevented from signing the licensing agreement with Allwyn, both the Commission and Allwyn will suffer significant damage as they are unable to take significant steps towards the start of the fourth license.
“This will almost certainly mean that, at the very least, the National Lottery is not working to its full potential at the beginning of the fourth term of the license.
“In addition, there is a real risk in these circumstances that, after the completion of the third license, there will be a period in which the National Lottery will not work at all.”
He said delays could jeopardize players’ prizes and money for good cause. Tanner said: “There would be no contributions to Good Causes during any period in which the National Lottery does not work.
“Participants’ interests would be jeopardized because the winners of the National Lottery games under the Third License [held by Camelot] may not be able to claim the awards after the expiration of this license. “
A typical draw has between 500,000 and 1.5 million prizes that can be claimed up to six months later. According to the Commission, Camelot and Allwyn will have to agree on a process to honor “millions of outstanding awards” and have closed-ended funds to ensure no one loses.
Even though there has been a delay in signing the clearance agreement, but there is no gap in the operation of the lottery, the Commission warned that there could still be £ 1 billion less for to good causes due to a deficit of income which was soon aggravated by a loss of interest in cash.
In its application, Allwyn proposed a 22-month implementation period, including a three-month contingency period. The Commission warned that June 30, 2022 would be less than the required minimum 19 months.
Tanner said: “If the Commission cannot reach an agreement, it is almost inevitable that material and irreversible damage will be done to the national lottery and to good causes, and there is a high risk that this damage will become significant. “.
The move is the latest save in one of the hottest lottery license contests in its 28-year history. In the run-up to the announcement, both Allwyn and Camelot had appointed lawyers in preparation to challenge the outcome.
The premise of Camelot’s challenge lies in the way a “risk factor” was applied to the bids of the contestants. Prior to the announcement, rival MPs and bidders had questioned whether the application of the risk factor, which affected 15% of the candidate’s final score, would favor the incumbent.
Since then, Camelot has argued that the regulator discounted the use of the risk factor in the final award due to concerns, which allowed Allwyn’s business plan to be much more ambitious but potentially risky. you came out victorious.
Allwyn had promised much higher returns for good causes despite plans to halve the price of a ticket for the main National Lottery draw.
In his court appearance, Camelot warned: “The award of the fourth license to Allwyn would effectively put [Camelot] out of business, and CUKL would probably be liquidated in due course. “
He added: “The loss of the UK contract will significantly reduce the Camelot Group’s ability to bid for and operate international lottery contracts in the coming years.”
A spokesman for Camelot said: “In our representations to the Court we have made it clear that we believe that there is no threat of suspension of the National Lottery in the period between the third and fourth license. Camelot has proposed a series possible solutions to the Court, including a provisional license that has already been used in similar circumstances, which eliminates this risk. “