Camelot is to lose its licence to run the UK national lottery after 28 years as the Gambling Commission named rival Allwyn as its preferred applicant to take over.
Allwyn, Europe’s largest lottery operator, is expected to take over from Camelot in 2024. It is owned by Karel Komarek the Czech billionaire, who made his fortune in sectors including oil and gas and has a joint venture with Russia’s state controlled gas company Gazprom.
“The selection of Allwyn as preferred applicant follows a fair, open and robust competition which received four applications at the final stage,” the Gambling Commission said.
“The Gambling Commission is content that all applicants are fit and proper to operate the national lottery. Recognising our role as a responsible regulator we are also satisfied that no application is impacted by sanctions related to the conflict in Ukraine.”
Labour intervened on Tuesday evening, calling on the government to explain whether it was “satisfied this company does not have links to the Russian regime”, a reference to Komarek’s business dealings with Gazprom.
However Komarek said he is in the midst of discussions with the government in Prague to nationalise the gas storage asset that he co-owns with Gazprom, in response to the invasion of Ukraine. In an open letter earlier this month, he condemned the “barbarism” of Vladimir Putin’s regime.
Allwyn, part of his KKCG conglomerate, is thought to have won the bidding after pledging to donate more than £30bn to good causes over the next decade, a much more rapid rate of return than the £45bn Camelot raised since it began running the national lottery in 1994.
“Our priority was to run a competition that would attract a strong field of candidates,” said the Gambling Commission chief executive, Andrew Rhodes. “Having received the most applications since 1994, it is clear we’ve achieved just that. We look forward to working with all parties to ensure a smooth handover.”
The company is also thought to have made bold commitments on preventing gambling addiction via the use of technology. Allwyn has also proposed reducing ticket prices from £2 to £1 and having two draws on one night.
Camelot, which employs more than 1,000 people, has been named as the reserve applicant and can still challenge the decision via a judicial review. It would continue to run the lottery “in the event that finalisation could not be achieved with the preferred candidate”.
The Allwyn bid chairman, Sir Keith Mills, was instrumental both in winning the 2012 Olympics bid for London and in organising the Games. In the world of business, he is revered as the brains behind air miles and Sainsbury’s Nectar card.
Allwyn’s star-studded advisory board also includes the former Sainsbury’s chief executive Justin King and the venture capital guru Brent Hoberman, and it is working with Vodafone on the technology underpinning its bid.
King will now take over as chairman of the Allwyn UK business.
“I’m delighted that Allwyn’s proposal has been deemed the strongest to grow good causes in the safest and most sustainable way possible,” he said. “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.”
“I am confident that the success of the competition will lead to a highly successful fourth licence,” said Rhodes. “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.”
The other biggest bidders for the licence were the Italian operator Sisal, which is now owned by Flutter, the owners of betting brands including Paddy Power and SkyBet; and the New Lottery Company, which is run by Richard Desmond’s Northern & Shell.
“I’m incredibly disappointed by today’s announcement, but we still have a critical job to do – as our current licence runs until February 2024,” said the Camelot chief executive, Nigel Railton. “We’re now carefully reviewing the Gambling Commission’s evaluation before deciding on our next steps. I’m enormously grateful to our 1,000-plus employees who have been unwavering in delivering record-breaking results during the current licence.”
Camelot staff will transfer to the Allwyn operation under the UK’s TUPE rules – the Transfer of Undertakings (Protection of Employment) Regulations – in line with the licence being moved to the new operator. However, it is not clear if the TUPE transfer will apply to all current staff.
