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Allwyn Looking to Acquire Camelot Ahead Of 2024 UK Lottery Change

camelot group logo and lottery ballsAllwyn, the company which received the licence for the National Lottery, is in talks to buy Camelot. The deal, which could cost as much as £100 million, would help smooth the changeover. It was earlier on in 2022 when the Gambling Commission chose Allwyn as the best candidate.

Camelot had some reservations over the awarding of the licence to another operator. That licence is something Camelot has possessed since 1994, when the lottery began. It said that the Commission had made a mistake in handing it over. Camelot then started legal proceedings. It stated that the competition was not held in a fair way, which the Commission disputed. Various legal battles have been on the table, although this move by Allwyn could be the last one. If it goes through, it will remove the final legal challenge that Camelot has against the UKGC.

Discussions between Allwyn and Camelot surround the former taking over the latter. It would thus mean that Allwyn controls the company that it is set to replace as lottery operator in the UK. Even though this is not set to happen until February 2024, the change will take time. If Allwyn controls Camelot, then there is less of a fight to go through.

The UKGC has already given the go-ahead to Allwyn with regard to control of the lottery. It reiterated this when Camelot opted to sue the regulatory body a few months ago. According to reports, the Commission is aware of the talks between Allwyn and Camelot. A deal could come about in the next few weeks if Camelot accepts the £100 million takeover.

Camelot would cede its earnings to Allwyn around one year before the operator change. Of course, that all depends upon if the current operator is willing to do so. The deal would also force the withdrawal of Camelot’s current legal challenge.

Sky News Reports on “Surprise Negotiations”

allwynIt was Sky News that broke the details of the negotiations between the two companies. Labelling them as a “surprise”, due to the harsh battles fought between the two, it was left to Allwyn to comment. Following speculation, the company said it was “engaged in advanced discussions”. That communication was with the Ontario Teachers’ Pension Plan (OTPP), which owns Camelot. This, Allwyn said, could lead to it purchasing the brand’s UK operations.

There were no financial details released by the global lotteries conglomerate, though. It was Sky News that suggested dealmakers had valued it at the £100 million figure.

That’s quite the difference to the £600 million Camelot is seeking from the UKGC. This, the operator said, is compensation from a bad competition design and rules. The original complaint was not in this form, though. In September, Camelot revised the legal challenge it had in place.

Before then, it was appealing the enabling of rights granted by the Commission to Allwyn. Yet it said that the withdrawal of that complaint was undertaken in good faith. Instead, Camelot said it would cooperate with Allwyn and the UKGC for the transition.

This, Camelot said, was so that it did not hinder the collection of money for good causes in Britain. This is a duty that it has overseen for the past 28 years, of course. Thus, the legal challenges against Allwyn disappeared. Now only the challenge against the Commission remains.

“If an agreement were to be reached, it would be subject to regulatory approvals”, said Allwyn. The company continued by saying that it hopes to reach a beneficial agreement by all. The deal, if it passes, would see Camelot and Allwyn working in full cooperation. Now, the Commission is monitoring the developments between the two.

Adjustments on the Horizon When Licence Changes

sazka logo on lotto ballsOnce Allwyn claims control of the National Lottery, certain changes are likely to occur. The first of these is the likelihood of the ticket prices decreasing by half. This would see them revert to their original price of £1, rather than £2. Camelot said sales had fallen for the first time in five years last year. Yet an £8 billion figure was still exceeded.

Speaking on behalf of Allwyn, chairman Justin King said:

“Under Allwyn’s stewardship, sales growth is expected to result in the money allocated to UK good causes more than doubling.”

Allwyn has also been making moves elsewhere. The multinational operator tried to list in the USA. This would have taken place with a special purpose acquisition company, SPAC. It was last month that market turbulence forced the deal off the table. Things remained unclear over whether the deal between Allwyn and Camelot would affect other things. The prime focus was on the company’s lottery activities within Illinois and Ireland.

Around 1,000 people currently work for Camelot at its Watford base. Most of these will shift over to work for Allwyn once the licence changes hands in 2024. What remains unclear is whether the UKGC will insist on separate governance for Camelot. Should Allwyn manage to buy the brand, it may request specific rules for the UK business side of things. Both Allwyn and Camelot declined to comment on these queries.

Allwyn has already won certain battles against Camelot. It first won the competition to receive the licence from the UKGC. Then it saw courts lift an automatic suspension on proceedings in June. With the withdrawal of Camelot’s legal proceedings, it stands in good stead. Time will tell whether an appropriate deal comes to light between the two companies. If so, it will make life a lot easier for Allwyn and its entry into the UK lottery scene.

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