High Court lifts suspension on the Gambling Commission’s ability to formally award the 4th National Lottery licence to Allwyn

Yesterday (29 June 2022), in the High Court (Justice and Technology Court), Mrs Justice O’Farrell delivered judgment in favour of the Gambling Commission in relation to its application to lift an automatic suspension on its ability to formally award the fourth National Lottery licence to Allywn Entertainment UK.

The judgment can be accessed online here. It is clear that what the judge considered to be in ‘the public interest’ played a key part in her decision. Concluding her judgment, she said:

The public interest in this case is a strong factor in favour of lifting the suspension. For the reasons set out above, maintaining the suspension until resolution of the dispute will cause delay to the Fourth Licence. In turn, this will cause delay to the benefits of the Fourth Licence, giving rise to reduced contributions to the good causes and delayed introduction of the enhanced game portfolio and new technologies. Balanced against the commercial losses that might be suffered by Camelot and IGT, for which damages would be an adequate remedy, in this case, allowing the Commission and Allwyn to proceed with the Fourth Licence is the course that will produce the least risk of injustice if ultimately it proves to be wrong. For the reasons set out above, the balance of convenience lies in lifting the automatic suspension so that the Commission is permitted to enter into the Enabling Agreement with Allwyn and, subsequently, to award the Fourth Licence.

In terms of relevant background information in relation to this litigation, see our following website postings:

The Gambling Commission welcomed yesterday’s judgment, stating as follows on its website:

Fourth National Lottery licence competition: Legal update

On 15 March, the Gambling Commission announced Allwyn Entertainment UK (“Allwyn”) as Preferred Applicant for the fourth National Lottery licence.

The Commission subsequently received legal proceedings in relation to the competition process, placing an automatic suspension on our ability to formally award the licence to Allwyn. That is why, in May, we asked the High Court to lift the suspension. We made clear that disrupting the implementation of Allwyn’s plans would present potentially severe consequences for the National Lottery and good causes. It also risked the National Lottery not operating to its full potential at the start of the fourth licence.

Today – 29 June – the court agreed to lift the suspension. We will, therefore, begin the important work of formally awarding the licence to Allwyn. Our priority is to continue to work to implement our decision and ensure a seamless and timely transition to the next licence, for the benefit of participants and good causes.

We will also now be preparing for trial of the various claims. We remain resolute that we have run a fair and robust competition, and that our evaluation has been carried out fairly and lawfully in accordance with our statutory duties. We have taken every step possible to ensure a level playing field for all interested parties, to enable us to appoint a licensee who will engage and protect players, run the National Lottery with integrity and ensure the National Lottery maximises support for good causes and its contribution to society through further innovation and investment.

In order to protect the integrity of the process, we will not be able to discuss the specifics until litigation has concluded.

A spokesperson for the long-time (and still current) operator of the National Lottery, Camelot UK Lotteries Limited, has said:

While disappointing, this judgement only addresses whether or not the Enabling Agreement can be signed while our case is heard. The judgment on whether the Gambling Commission correctly and lawfully awarded Preferred Applicant status is being dealt with separately. We will take some time to consider our next steps and continue to believe that we have a very strong legal case. In the meantime, we remain dedicated to maximising returns to Good Causes, building on our record performance over the past two years.

Allwyn has understandably reacted positively to the judgment with a statement saying:

Today’s ruling is good news for The National Lottery; it enables the Gambling Commission to move forward to award Allwyn the Fourth National Lottery Licence. Mrs. Justice O’Farrell was clear that the public interest, and in particular the impact on good causes, was a strong factor in her judgment. Her decision paves the way for the transition to Allwyn, the winner of the Fourth Licence Competition, serving The National Lottery as its operator from February 2024; kickstarting a transformation programme that brings an enhanced games portfolio, new technologies, provisions for safer play, and a substantial increase in returns to good causes.  We look forward to the Gambling Commission moving to Award and to Camelot working constructively with us to ensure a smooth handover for the benefit of players and good causes alike.


UPDATES:

1. On 30 June 2022, the above judgment was amongst the issues raised by the DCMS Committee conducting a “What next for the National Lottery?” Inquiry during its fourth oral evidence session when – as we have reported here – the following witnesses were called:

This oral evidence session can be viewed on ParliamentLive.TV here. A transcript of the oral evidence can be accessed here.

2. On 4 July 2022, The Times published an article entitled ‘Camelot raises new lottery concerns’, in which it maintains that “the Particulars of Claim lodged by Camelot in its legal battle with the Gambling Commission …. quotes the independent evaluators of the bids describing [Allwyn’s] revenue projections as “implausible and carrying “a high degree of risk”.

3. As reported by us here, on 14 July 2022, the Court of Appeal granted permission to appeal the above-mentioned judgment of Mrs Justice O’Farrell, as a result of which the automatic suspension of the Gambling Commission’s ability to formally award the fourth National Lottery licence to Allywn remains in place pending the outcome of that appeal.