The UK lottery regulator has rebuked the ‘mismanaged’ licensing process

The UK’s gambling regulator oversaw a “poorly managed” competition process to decide the next national lottery operator, according to a report by a cross-party group of MPs.

In March, the Gambling Commission selected Czech-based conglomerate Allwyn as the next national lottery operator to replace current Camelot, marking the first change of ownership in the lottery’s 28-year history following a heated bidding process.

However, Camelot and its technology supplier, International Game Technology (IGT), tried to overturn the decision in court, delaying the transfer of the license until finally dropping their legal challenge in September.

Allwyn announced on Saturday that it had agreed to buy Camelot in a £100m deal aimed at facilitating the handover of operations before Allwyn formally takes over the 10-year National Lottery license in February 2024.

The House of Commons digital, culture, media and sport committee said the Gambling Commission had “followed its predecessors in overseeing a poorly managed competition”. The regulator first assumed responsibility for the supervision of the lottery in 2013.

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MPs also said they were “worrying” at reports that another legal case, in which Camelot and IGT sought financial damages, could divert up to £600m from the National Lottery’s good causes budget.

However, following the takeover by Allwyn, Camelot is expected to drop the case, which is currently scheduled for January 2023, but IGT could still seek £100m in damages. IGT did not respond to a request for comment.

The committee called on the Gambling Commission to “review the planning process for the license competition”.

The report added that the regulator should keep a “vigilant eye” on Allwyn’s well-intentioned returns “to ensure that core distributors are not replaced once again” after growing criticism of Camelot that its profits are being driven by declining ticket sales and donations grew despite

In the year to March 31, Camelot raised £1.9bn for organizations including UK Sport, the Arts Council and the British Film Institute.

“The next license period has got off to an unfortunate start with flaws in the competition process leading to claims for damages, which could ultimately shortchange charities and other charities that rely on Lottery funding,” said Julian Knight, chairman of the commission. “Mistakes must be corrected for the future.”

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“The Gambling Commission and new operator Allwyn now have the opportunity to work together to restore the connection between the public buying tickets and supporting worthy causes and projects in their local communities,” he added.

The commission also called on the regulator to close “loopholes” that allow lottery participants to bet using credit cards, a practice banned on betting sites, and said it must ensure Allwyn’s gross pay at least 0.1 percent of your gambling returns. to the GambleAware charity.

“We remain adamant that we run a fair and robust competition and that our assessment was conducted fairly and lawfully in accordance with our legal obligations,” the Gambling Commission said.

Allwyn said many of the DCMS committee’s recommendations were “already part of our plan for the National Lottery”. “Allwyn is focused on safely and sustainably increasing charitable returns over the ten-year license period,” he added.

Source: https://www.ft.com/content/06e03e74-ab99-4d48-8980-d5fcc635e3c5