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Camelot Loses Its National Lottery Licence, Allwyn To Take Over In 2024

sazka logo on lotto ballsIt has been confirmed that Camelot, the company that has run the National Lottery in the UK since its 1994 launch, will be losing its licence in two years. The United Kingdom Gambling Commission has confirmed that its preferred company to take on the lottery licence moving forward is Allwyn Entertainment Limited, who will take over the licence from 2024 onwards. There was stiff competition to take over the running of the lottery, with the UKGC saying that more companies had applied to take on the licence sits it was first issued nearly three decades ago.

Four firms applied to take over the licence for the National Lottery, with Allwyn Entertainment winning and Camelot being named as the ‘reserve applicant’. There is little surprise that it is such a popular thing to take on the running of, given that it is one of the world’s largest lotteries. Since it was launched, more than £45 billion has been raised for around 660,000 causes in the UK. Allwyn Entertainment is the Swiss-based subsidiary of Sazka, Europe’s largest lottery operate. The company is owned by Karel Komarek, a Czech oil and gas tycoon.

Why The Change

lotto game icons

The licence to run the National Lottery in the UK is meant to come under review on a regular basis, with Camelot having faced stiff opposition to keep hold of it in the past. The initial licence was granted in 1994 and lasted until 2001, with the next licence taking the company through to 2007. The 2001 licensing was somewhat controversial, with a bid having been put forward by Sir Richard Branson and the People’s Lottery. There was a feeling of amazement from Branson and his organisation that the bid, which they originally won, was given to Camelot after an appeal.

Similarly, an Indian company called Sugal & Damani had been surprised that they hadn’t been able to take the lottery licence six years before. There was a feeling that the deck was always stacked against the Mumbai-based business, on account of the fact that the UKGC had specifically said that there needed to be a ‘smooth transition’ to the next licence. For critics, this meant that Camelot had a clear advantage of its competition, on account of the fact that the company was already running the lottery and was therefore the only one that could truly make such a promise.

When Camelot won the right to run the Lottery in 2007, it was initially issued with a licence to do so from 2009 to 2019. In March of 2012, that was extended by four years, meaning that bids should have been organised in order to allow the new company to take over the licence in 2023. In December of 2021, however, a decision was made to extend that further, offering Camelot a new ‘Licence Expiry date of 31 January 2024’. There were no further extensions issued, however, and so Camelot will bid goodbye to the Lottery at the end of this licence period.

Camelot Has Faced Criticism

instant win games and scratchcardsFor many, the end of Camelot’s reign as the guardians of the National Lottery should have come much sooner. The company has faced criticism over the years, with many feeling as though the Canadian investment fund that owns it has chosen to mile the lottery for profits, instead of concentrating on helping the good causes that the lottery is associated with. Though Camelot has always disputed such allegations, but there is certainly some evidence to back up the criticism. This includes Camelot’s obsession with launching new scratch cards that offer little for good causes.

A priority was given to higher-priced scratch cards, which offered high prize-payout percentages and therefore brought in more customers, but that also have a minimal increase in the amount of money that ends up going to good causes. This is because much of the sale price ends up going to pay the prizes, meaning that less of it is available for the National Lottery’s charities. Another criticism suggests that if Camelot were to win again then fewer companies would try to bid for the right to run the lottery in the future, making it akin to a state-run lottery.

Who Are Allwyn Entertainment?

allwynThe most obvious question for most punters comes in the form of asking who, exactly, Allwyn Entertainment are when they’re at home. The good news for lovers of the lottery is that they do not what they’re doing, having been Europe’s largest lottery operator for a number of years. Karel Komarek is a Czech billionaire who made his fortune in numerous different sectors, including oil and gas. They have an advisory board that is filled with the great and the good, including Justin King, the former Chief Executive of Sainsbury’s, and venture capitalist Brent Hoberman.

Sir Keith Mills, the man that was Chairman of the company’s bid, was an instrumental figure in London’s bid to host the 2012 Olympic Games and then helped to organise them. As a businessman, Mills is considered to be the brains behind both Air Miles and Sainsbury’s Nectar Card. He said,

“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.”

Why Did They Win?

allwyn entertainment lottery markets

Allwyn Entertainment already runs lotteries in Czech Republic, Greece, Cyprus, Italy, and Austria, so the experience was clearly there for them be confident of being able to take over the running of the UK lottery from Camelot. Interestingly, the Gambling Commission has remained somewhat coy about what it was that the company had that has allowed them to wrestle control of the National Lottery from the people that have been running it since 1994. Categories like technology and planned returns to good causes were part of the consideration made by the UKGC.

It appears as though the return to good causes was one of the big winning parts of Allwyn’s bid, pledging £30 billion over the ten years of the licence. When you consider that Camelot have raised £45 billion over nearly 30 years, you can see why Allwyn’s approach was a winning one. It is also the case that the winning bid promised more help for those with gambling problems, curbing addiction. With Camelot having been rebuked by the National Audit Office when profits rose more than returns to good causes, it is clear that the UKGC wanted a different approach.

Allwyn Isn’t Cleaner Than Clean

gazprom plantWhilst those deciding which company should win the licence for the National Lottery have clearly been impressed with Allwyn Entertainment’s bid, not everyone is convinced that the company is whiter than white. Bringing back the glitz of the lottery from its first few years in the country is a good thing, as is the pledge to use new technologies to encourage a return of younger customers who have turned to online casinos. Yet there is a reason for some to be sceptical of Allwyn Entertainment’s parent company, Moravske Naftove Doly.

It has emerged that the company formed a joint-venture with the Russian energy group Gazprom back in 2016. It happened when an underground gas storage facility was opened in the Moravia area of the Czech Republic. Given the current situation in Ukraine, there are many that feel as though such a deal goes against what the national lottery provider should be standing for. In an open letter from Komarek in March, the owner of the company said that he had been a ‘very public critic’ of Vladimir Putin. He described the invasion of Ukraine as

“a senseless act of aggression that must be condemned in the strongest possible terms”.

He went on,

“I took the decision many years ago to divest and exit from Russian assets with the exception of a shareholding in a gas terminal which we have been trying to exit for a number of years and a 50/50 joint-venture with Gazprom on an underground gas storage facility in the Czech Republic.”

He also appears to be working with the Czech government on a plan that would see the gas asset become nationalised. That, it is hoped, will satisfy the critics of MND, with the Labour Party saying that the UKGC needed to be confident that there were no links to Russia.

What Will Happen To Camelot?

camelot group logo and lottery ballsThe big question for Camelot now becomes about what happens next. Nigel Railton, the Chief Executive of the company, expressed his disappointment in the decision, but also highlighted that the company ‘still have a critical job to do’. The licence takes Camelot up to February of 2024, presuming that any appeal over the decision is lost. Railton said,

“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.”

For the staff that work for Camelot, the future is relatively certain. The Transfer of Undertakings (Protection of Employment) Regulations say that they will move over to become part of the Allwyn operation. Whilst there is some confusion about whether that applies to all staff, but it’s certainly true that the majority will feel safe about what happens next. What isn’t clear is whether or not Camelot will continue to operate as a company if the licence for the National Lottery does indeed switch over to Allwyn Entertainment.

Camelot is owned by the Ontario Teachers’ Pension Plan, which is a vast investment fund with fingers in numerous different pies. It manages as much as £140 billion in assets, of which Camelot was just one. Though it has offered them a steady and lucrative investment, Camelot exists purely to operate the National Lottery. If the licence is no longer there for the company to do as much, it is unclear what it is for. As a result, it is not out of the realms of the possible that it might be closed down altogether in the years that follow the licence switch.

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