Delay reported for the UK’s Fourth National Lottery Licence Competition

We reported in March 2019 on the initial news of the fourth National Lottery Licence Competition (“4NLC”) and – on that same Clifton Davies webpage – have since provided updates as they occurred throughout 2019.

Further news of 4NLC has been awaited this year but little has been forthcoming since October and November 2019.

It has now been reported in the media (including the Financial Times) that 4NLC has been delayed by reason of the coronavirus pandemic, with the Gambling Commission quoted as saying that:

  • the lockdown has created too much uncertainty for the contest to launch on the scheduled date of 7 May 2020 and
  • potential bidders have been told that an update on the timetable will be provided in late May.

The Financial Times states that Virgin is no longer a potential bidder, having pulled out last week because of a need to “focus resources on other parts of the Virgin Group …. after the government refused to support its initial submission for a bailout of the airline”.

Other potential bidders include the Sazka Group, Northern & Shell Group and current National Lottery operator Camelot.

In February this year, the Financial Times reported a delay in circulation by the Gambling Commission of a procurement questionnaire due to be received by bidders, resulting in a two-month delay in the scheduled timetable for 4NLC, it having been previously expected that the winner would be announced in February 2021.

According to that Financial Times report:

  • that delay reportedly had led one potential bidder to say: “Any delay will favour the incumbent. It’s going to cost bidders a huge amount of extra money and shortens the transition period, raising questions about whether the Gambling Commission will be more risk averse to awarding the licence to a new entrant” but
  • the Gambling Commission had responded saying that “the timetable was a draft sent out to bidders and dates were only indicative” adding that it “is focused on running a fair and open competition to find the right operator …. ensuring that all potential bidders are on an equal footing is very important and we will welcome as many bidders as possible to the competition when it launches in early 2020”.

Subsequently, in March 2020, iGamingBusiness reported that both the Gambling Commission and the Department for Digital, Culture, Media & Sport were stating that the competition “is on track to launch in the first half of this year”. Nevertheless one anonymous bidder was quoted as saying: “The delay in the Fourth National Lottery licence competition provides an enormously unfair advantage to Camelot. Bidding for the National Lottery involves substantial costs, and the current uncertainty is unsustainable for potential challengers. Without a clear timeline, there is a significant risk of credible bidders abandoning their interest. The National Lottery deserves a vigorous competitive process where Camelot’s incumbency is challenged, otherwise it may as well be a state-run lottery”.

According to the iGaming Business articlea spokesperson for the Gambling Commission said: “The Gambling Commission is focused on running a fair and open competition to find the right operator who will engage players and protect them, run the National Lottery with integrity and continue maximising returns to good causes. We have been encouraged by the healthy level of interest in the market engagement from a wide range of interested parties. Ensuring that all potential bidders are on an equal footing is very important and we will welcome as many bidders as possible to the competition when it launches in the first half of 2020.”

Later in March 2020 as the UK lockdown approached, SBC News reported (under the heading “UKGC Maintains National Lottery Tender Timetable“) the Gambling Commission as stating: “We are carefully monitoring the advice of Public Health England and as an organisation, we will respond appropriately to their advice, as it develops. At this stage, the programme timeline is unaffected and we remain on track to launch the competition in the first half of 2020″.

We await further news – including from the Gambling Commission (that has not as yet publicly confirmed whether there is to be any delay in the 4NLC timetable) – but, in the meantime:

1. We can confirm that on 1 April 2020 the House of Commons Library published a useful research briefing document entitled “The National Lottery – How does it work?“, that you can download below.

2. PoliticsHome.com has today (6 May 2020) published an article for TheHouse entitled “The health of the National Lottery is central to rebuilding the nation”, in which Matt Vickers MP (Conservative MP for Stockton South) argues that “the National Lottery should, by any definition, be a part of the government’s delivery mechanisms to achieve that new equilibrium”, adding (by reference to 4NLC) that:

…. it strikes me that if Camelot were to win the license again, for a fourth consecutive time, it should surely raise doubts about the actual competitiveness of the competition. With an institution approaching state-run lottery status, I wonder whether anyone else would bother expending millions of pounds to ever bid again! In my view, the fourth licence competition is the most important one yet. As our wounded nation recovers from the pandemic over the years to come, we need a strong and healthy National Lottery to keep making the needed investments to good causes across the country. That’s why I, for one, am hoping to see a good, open, and fair licence competition, which tests each of the prospective bidders over how they plan to grow the sales of lottery tickets in a market where they have been shrinking for years.