UK lottery regulator rebuked for ‘poorly managed’ licensing process

The UK’s gambling regulator oversaw a “poorly managed” competition process to appoint the National Lottery’s next operator, a report by a cross-party group of MPs has concluded.

The Gambling Commission chose Czech-based conglomerate Allwyn as the next National Lottery operator over incumbent Camelot in March, marking the first change of hands in the lottery’s 28-year history after a hotly contested tender process.

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

Allwyn announced on Saturday that it has agreed to buy Camelot for £100m, with the aim of facilitating the transfer 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 was “following its predecessors in policing poorly managed competition”. The regulator first took control of the lottery in 2013.

MPs also said they were “disturbed” by reports that a further court case, with Camelot and IGT pursuing financial damages, could result in up to £600m being diverted from the National Lottery’s good causes budget.

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

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

The report added that the regulator should “vigilantly monitor” Allwyn’s good cause profits “to ensure that fund distributors are not short-changed again” following growing criticism of Camelot’s rising profits despite falling ticket sales and donations.

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

Committee chairman Julian Knight said: “The next license term got off to an inauspicious start with perceived flaws in the competition process, resulting in a compensation claim that could short-change charities and other good causes based on lottery funding.” “Flaws must be corrected for the future.”

“The Gambling Commission and new operator Allwyn now have the chance to work together to restore the link in the public’s mind between buying tickets and supporting worthy causes and projects in local communities,” he said.

The committee also called on the regulator to close a “loophole” that allows lottery participants to bet using a credit card, a practice banned on betting sites, and said Allwyn must pay at least 0.1 percent of gross gambling revenue. to the GambleAware charity.

“We maintain our determination that we compete fairly and robustly and that our assessment is conducted fairly and lawfully in accordance with our statutory duties,” the Gambling Commission said.

Allwyn said many of the DCMS committee’s recommendations “already form part of our plan” for the National Lottery. “Allwyn’s focus will be on generating profit for good causes in a safe and sustainable manner over the ten-year license period,” he said.