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Sazka's Allwyn Wins UK National Lottery Bid, Ending Camelot's 28-Year Tenure
By Jeff Osienya Mar 18, 2022 IndustryAfter 28 years of operating the UK National Lottery, Camelot has lost its bid on one of the most lucrative contracts in the British public sector. Allywn, a subsidiary of a Czech gaming group, was UKG’s preferred candidate to take over from Camelot.After nearly three decades of serving lottery fans in the UK, Camelot will not be renewing its license as the official operator of the UK National Lottery. Following a heated competitive bidding process, the UK Gambling Commission awarded Camelot’s rival Allwyn Entertainment as the winning candidate to take over as the National Lottery Operator.
Allwyn is a UK-based subsidiary of Sazka, a Czech gaming group famed for being the largest lottery operator in Europe. The Sazka group is owned by Karel Komarek, a Czech oil and gas billionaire businessman. Should things go as planned, Allwyn is expected to take over UK National Lottery operations from Camelot in 2024.
This move has come as a surprise to many industry observers owing to the long-standing relationship between the UKGC and Camelot that has lasted 28 years. It is, of course, a subject that has hit the airwaves hard owing to the lucrative nature of the tender that Allwyn has just won. And while the deal is expected to be watertight with no obvious problems anticipated, there is a clause in place that could bring Camelot back into action. The clause names Camelot the “reserve applicant,” meaning that if the deal doesn’t fall into place as planned, Camelot will continue running the lottery. So, the UKGC has given Camelot second dibs on the lucrative contract while Allwyn is the proffered candidate of the National Lottery’s operator license.
Big Bucks Were On the Line in a Competitive Tendering Process
The next ten-year licensing tenure for the UK National Lottery is projected to generate an estimated £80 billion (~ $108 billion) for the operating company. As a result, the just-concluded tendering process was so spirited that it is said to have received the most applications since the year 1994.
It was a highly secretive procedure that involved four bidders who battled it out for the bragging rights to the contract. The four bidders were The New Lottery Company Ltd, Italian operator Sisal, Camelot, and of course, the eventual winners Allwyn. Andrew Rhodes, who serves as the UK Gambling Commission’s Chief Executive Officer, expressed confidence in the results of this intricate process, stating:
Quote“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 we’ve achieved just that. We look forward to working with all parties to ensure a smooth handover. I am confident that the success of the competition will lead to a highly successful fourth license. One that maximizes returns to good causes promotes innovation, delivers against our statutory duties, and which ultimately protects the unique status of the national lottery.”
How Did Allwyn Best Camelot in the Bidding Process?
In case you were wondering, the Allwyn bid to become UK’s lottery operator was powered up by the company’s pledge to donate £38 billion (~$50 billion) to charity by 2034. This was a hard bargain as Camelot has only raised £45 billion (~$59 billion) for good causes over its current 28-year tenure running the country’s lottery.
Justin King, the former Sainsbury’s CEO who will now take over as the chairperson of the Allwyn UK business, underscored the role that the charitable pledge played in Allwyn’s victory. He said:
Quote“I’m delighted that Allwyn’s proposal has been deemed the strongest to grow good causes in the safest and most sustainable way possible. The Gambling Commission has run a lengthy and detailed process, and I’ve been extremely impressed by the attention they have paid to the challenges facing the national lottery over the coming decades. The national lottery is a vital British institution, and we’re focused on ensuring it plays an even bigger part in society by increasing participation, improving safeguards, and giving back more to good causes.”
As we speak, Allwyn’s multi-national lottery operations have a dominant footprint in Greece, Cyprus, Italy, Austria, and of course, the Czech Republic. With its latest tendering success, the company is expected to leave a lasting impression in the United Kingdom. Expressing delight on his company nabbing the contract, Allwyn’s bid chairman Sir Keith Mills in the following statement:
Quote“The National Lottery is a national treasure, and we are honored to have been chosen as its future custodian. With the Gambling commission having put its trust in us, we can immediately start to enact our exciting plans to deliver the national lottery back to the heart of the country. We will do this by rekindling the meaning the National lottery has for each of us, whether as individuals or as part of the communities we live in, whether we play the national lottery or not.”
Indeed, it has been a good couple of months for the leading European lottery operator, with its star soaring quite high recently. Besides the huge UK National Lottery win, Allwyn announced in January that it intends to become a publicly listed company on the New York Stock Exchange (NYSE). The company plans to achieve its NYSE ambition by merging with an NYSE-listed special purpose acquisition company (SPAC) known as Cohn Robbins Holdings Corp. (CRHC). By going public, the company’s value is expected to be boosted to a whopping $9.3 billion.
Sore Loser or Tainted Process?
Of course, Camelot wasn’t thrilled with the results of the said process. While expressing disappointment on the direction that the tendering process took, Camelot’s CEO Nigel Railton said that his team is carefully reviewing the UK gambling commission’s evaluation before taking its next steps. He further stated,
Quote“I’m enormously grateful to our 1000-plus employees who have been unwavering in delivering record-breaking results during the current license. And I know they remain absolutely determined to build on our four and a half years of successive sales growth- which has seen us achieve record sales in each of the last two years, resulting in the best ever returns to good causes from ticket sales last year.”
At this point, however, it is difficult to tell whether Camelot’s suit will bear fruition. Nonetheless, it’s worth pointing out that in the 2000 tendering process for the UK National Lottery, the company had been disqualified after it was discovered to have improperly calculated winnings. As such, the UKGC had automatically awarded the contract to the only other remaining contender, Richard Branson’s Virgin. However, Camelot successfully challenged the decision in the High Court and was controversially handed back the license to operate the nation’s lottery.
The looming legal standstill aside, Camelot will keep the reigns for the 22-month transitional period and hand over to Allwyn to run the day-to-day activities on 1st February 2024. Initially, there were concerns about Komarek’s alleged links to the Russian regime that is now at odds with most of the west over its invasion of Ukraine. Komarek has, however, come out to strongly criticize the “barbaric” nature of the invasion, seemingly to convince the world of his non-association with the Kremlin.
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