IGT Sues Over National Lottery
Author:
Jacob McKenzie
In a fresh development to the ongoing National Lottery License dispute, International Game Technology is taking legal action against the Gambling Commission over the ten-year contract. IGT, the technology partner of outgoing lottery operator Camelot, is suing the gambling watchdog under European human rights laws. It argues that the decision to award the lucrative license to Allwyn has cost it “marketable goodwill”.
IGT is arguing that the Gambling Commission has breached its human rights in awarding the National Lottery license to Allwyn. ?Ekaterina Bolovtsova/Pexels
Allwyn Wins Lottery
It had seemed that the bitter legal battle for control over the National Lottery license was over. In November, long-standing operator Camelot relented, allowing the Gambling Commission to formally award the license to Czech-owned Allwyn. Now it has emerged that International Game Technology, Camelot’s technology partner, has reignited the case.
As reported by The Times, IGT is set to appeal the Gambling Commission’s decision under European human rights laws. The Italian company claims that it has suffered the loss of “marketable goodwill” as the operator of retail lottery ticket machines. IGT’s renewed lawsuit could cause further delays to the transition process of the license, which is due to commence next month.
Following the fourth National Lottery license competition, the Gambling Commission chose Allwyn as its preferred candidate to take over the license. Camelot, which was named as the reserve applicant, lost control of the lottery for the first time since its launch in 1994. Camelot had managed to fend off the opposition for all three prior competitions.
Allwyn’s win came as a shock to many, including Allwyn itself. The European lottery giant had launched a High Court challenge against the Gambling Commission a matter of days before the announcement, in the expectation that it would lose. Other applicants to lose out on the license included Italian lottery operator Sisal and porn baron Richard Desmond’s New Lottery Company.
At the time, the Gambling Commission explained that it was Allwyn’s commitment to investing in the National Lottery that had paved the way for its success. Allwyn, previously known as Sazka, had outlined a bold investment plan which is expected to deliver growth and innovation across the lottery’s products and channels. It projects that it will double the amount of money allocated to good causes. Allwyn has also pledged to improve player protections and launch a cutting-edge technology platform.
Legal Battle
Shortly after the Gambling Commission named Allwyn as its winner, Camelot launched a legal challenge against the regulator. It alleged that the Commission broke the law when opting to award the license to its rival. Camelot argued that the score card system used by the judges to assess the bids was changed late in the competition.
In February 2022, the Telegraph reported that Camelot’s scorecard had come out on top and that the incumbent had been recommended as the winner to then Prime Minister Boris Johnson. The regulator denied that claim, although all signs pointed to Camelot retaining the license.
Following the conclusion of the competition it emerged that the Commission had revised a 15% risk factor discount on the financial projections of bidders down to zero. As a result, those who submitted more ambitious proposals scored higher. Allwyn projected that it would raise ￡38 billion for good causes, millions more than Camelot’s estimate.
The Gambling Commission maintained that the competition it oversaw was fair and robust throughout. However, last July Camelot and IGT went to the Court of Appeal to ensure that the Commission’s suspension on awarding the license to Allwyn remained in place. Until September the awarding process was at a standstill.
Camelot then opted to drop its legal challenge. It was not immediately clear whether IGT had also dropped its own challenge, although that seemed to be the case. The Gambling Commission was pleased to be able to move forward with awarding the license and working with all parties to ensure a smooth and efficient handover.
The Gambling Commission has formally awarded the license to Allwyn, which will take over as the manager of the National Lottery on January 1st 2024. Since its launch nearly thirty years ago, the National Lottery has raised more than ￡45 billion for 660,000 good causes across the UK. Valued at ￡6.4 billion, the National Lottery contract is the most lucrative public sector contract in the UK.
Human Rights Violated
Allwyn has further consolidated its position as a market leader in lottery operations by acquiring Camelot UK from its parent company, the Ontario Teachers Pension Plan. It expects to finalize the takeover from the Canadian firm by the close of the current quarter.
Speaking on behalf of the lottery giant, Chairman Robert Chvatal explained that the acquisition would help to break down barriers in the transition process between the outgoing and incoming license holders. The deal is reported to be worth in the region of ￡100 million.
Unfortunately, IGT’s renewed lawsuit could cause further problems for the handover of the National Lottery. Concerns have also been raised that the case could also drain money away from the lottery’s Good Causes fund. If the litigation is successful IGT could stand to receive up to ￡600 million in damages from that fund.
A number of MPs have criticized IGT’s lawsuit, over the risk it poses to charity money. Ben Bradley, MP for Mansfield, and Sally-Ann Hart, MP for Hastings and Rye, described IGT’s appeal to the European Court of Human Rights as “unacceptable”.
IGT is arguing that the UKGC has violated Article 1 of the European Convention on Human Rights as well as the European Union’s Human Rights Act. This concerns the rights of individuals rather than companies. It appears that IGT is arguing that the Commission has violated the rights of individuals by denying it the ability to act in a charitable capacity.
Camelot has also come under fire over the National Lottery’s contributions to Good Causes. Critics have argued against the lottery’s increased offering of instant games which pay out more cash to help drive sales. These games pay out less to good causes and have sparked concerns over problem gambling.
