Camelot set to lose National Lottery licence after 30 years

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The Gambling Commission has insisted that a Czech billionaire probed over his links with a Kremlin-controlled energy giant is not ‘impacted by sanctions’ as his firm looks set to take the National Lottery from Camelot after three decades.  

A fiercely contested bidding process has been ongoing between four parties to aiming to obtain the licence for one of the largest lotteries in the world.

But officials have said Czech lottery operator Allwyn is now the ‘preferred applicant’ to take over the venture from Camelot in 2024.

The firm, previously known as Sazka before it rebranded with an anglicised name during the bidding process, has pledged to more than double donations to good causes to £38billion over the next decade.   

But its owner Karel Komarek has faced scrutiny over his links with Russian-state energy giant Gazprom, which is controlled by the Kremlin.

His company MND (Moravske Naftove Doly) formed a joint venture with Gazprom to build an underground gas storage facility in his home country, which opened in Moravia in 2016.

For several years, MND also held a stake in a Czech gas importer that is majority-owned by subsidiaries of Gazprom, although it no longer does so.

The Gambling Commission said it was ‘satisfied that no application is impacted by sanctions related to the conflict in Ukraine’. 

And in an open letter earlier this month, Mr Komarek condemned Russia’s ongoing invasion of Ukraine and said he was discussing the removal of Gazprom from the joint venture. 

Camelot has operated the National Lottery since its launch in 1994, and took over the nation’s screens with televised draws hosted by the likes of Dale Winton, Anthea Turner and John Cleese.

The company fought off seven competing bidders to win the first contract and, within 24 weeks, had placed terminals in 10,000 retailers.

The televised lottery draw had a peak audience of more than 20 million for the first ever result in 1994 presented by Noel Edmonds.

However, at the end of the first licence period in 2001, the novelty had begun to wear off within the public. 

Controversy also emerged four years earlier when it was revealed three senior Camelot officials had been awarded six-figure bonus payments.

Bidding for the third term resulted in a High Court fight, led by Camelot, after the licence was initially handed over to Richard Branson’s People’s Lottery.

Camelot won the bid for a third term in 2007, when it fought off competition from Indian lottery group Sugal & Damani – the only other company to make a bid.

The Gambling Commission then awarded Camelot a ten-year licence to run the National Lottery from 2009, before this was extended by a further four years in March 2012.

But after more than 20 years of running the lottery, Camelot has lost out to Czech lottery operator Allwyn. 

Camelot has been named ‘reserve applicant’. Other applicants believed to still be in the process, which has not yet been completed, include Sisal Spa and The New Lottery Company Ltd. 

Sisal, which operates the Italian lottery has assembled a well-connected team of advisors, including Lady Brady, of Apprentice and West Ham football club fame, and fellow Tory peer Lord Vaizey, the former culture minister.

Camelot has also boasted that it has created more than 6,300 millionaires or multi-millionaires since the launch in 1994.

The licence includes all games such as Lotto, EuroMillions – which is run by different operators in each country – and the Thunderball.

But politicians have been concerned about the proportion of Camelot’s revenues going to good causes.

The company’s profits have soared from £29 million in 2010 to £78 million in 2020, thanks in part to more emphasis on scratch cards and instant-win games online. But an average of 10p in every pound spent on scratch cards goes to charities, compared with 30p in the pound from draws.

Camelot has pointed out that more than £45 billion has now been raised for good causes and that it has also delivered £140 billion for winners and society, adding that ‘focusing on one part of the games portfolio doesn’t give an accurate picture’

Allwyn is said to have spent £9million on its bid to become the next lottery operator, and has even appointed Lord Sebastian Coe, the president of World Athletics, to its board as a non-executive director.

The commission said Allwyn had committed to invest in the National Lottery to deliver growth and innovation across the various products and channels and increasing contributions to good causes. 

As part of its bid Allwyn pledged to donate £38 billion to good causes over the next decade, almost equivalent to the £45 billion Camelot raised since it began running the national lottery in 1994.

It has also proposed reducing ticket prices from £2 to £1 and having two draws on one night. 

Media tycoon Richard Desmond, who previous owned the Daily Express and Channel 5, was also an applicant.  

The Gambling Commission said: ‘The selection of Allwyn as preferred applicant follows a fair, open and robust competition which received four applications at the final stage.

‘This is the highest number of applications since the first National Lottery licence was awarded in 1994. 

‘Allwyn has committed to investment in the National Lottery that is expected to deliver growth and innovation across the National Lottery’s products and channels, resulting in increased contributions to good causes, subject to the protection of participants and propriety.

‘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.’

Allwyn responded to the news by saying the company would want to ‘breathe fresh life into The National Lottery’.  

Gambling Commission chief executive Andrew Rhodes said: ‘In its lifetime, the National Lottery has raised more than £45 billion for good causes and is rightly seen as a great national asset.

‘Our priority was to run a competition that would attract a strong field of candidates. Having received the most applications since 1994, it is clear that we’ve achieved just that.

‘I am confident that the success of the competition will lead to a highly successful fourth licence – 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.

‘We look forward to working with all parties to ensure a smooth handover.’

Allwyn said: ‘We welcome today’s statement by the Gambling Commission that we have been selected as the preferred applicant for the fourth National Lottery licence.

‘Our proposal was judged to be the best way of growing returns to good causes by revitalising the National Lottery in a safe and sustainable way.

‘The appointment of Allwyn will breathe fresh life into the National Lottery.’

Camelot chief executive Nigel Railton said: ‘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.

‘We’re now carefully reviewing the Gambling Commission’s evaluation before deciding on our next steps.’