Gambling Commission considers action against Allwyn over National Lottery delays

The Great Britain Gambling Commission is reportedly weighing taking regulatory action against Allwyn over its failure to deliver on promises made during its successful bid for the fourth National Lottery licence.

According to The Times, the commission is concerned that Allwyn has not met certain contractual milestones since securing the licence. Czech-headquartered Allwyn assumed control of the UK National Lottery in February last year.

Areas of concern to the regulator are said to include delays to digital upgrades. Allwyn is also said to have pledged to reduce ticket prices for the main National Lottery draw from £2 to £1, but this is yet to take place.

Responding to the speculation, the commission said it would not comment on individual cases before any decisions are made. The regulator has the power to take action such as issuing formal warnings and financial penalties.

“Where the Gambling Commission decides to commence enforcement action, the process is investigative in nature,” the commission said. “We do not usually talk about individual cases. We may publish information about enforcement cases once they are complete.”

Allwyn committed to National Lottery improvements

Allwyn issued its own reply to the speculation. It reiterated that it is committed to upgrading and modernising the system, with a planned total spend of more than £350 million ($467 million) on improvements.

“Our investment will help restore the magic to The National Lottery,” Allwyn said. “But the shift from outdated systems is complex and requires robust testing. We will deliver essential upgrades over the coming year. We are working at pace to complete this transformation as soon as possible.”

The Times also highlighted recent comments in corporate filings. Signed off by Allwyn Chief Financial Officer Kenneth Morton, the filings referenced a “demanding” timetable for the operator.

“The timetable is more demanding operationally, while the delivery of the transition also depends in part on third-party suppliers,” the filings said. “While Allwyn UK continues to progress as expeditiously as possible while prioritising contributions to good causes, after the end of the reporting period a contractual milestone in the enabling agreement was not reached.

“The Gambling Commission is reviewing what, if any, enforcement action might be taken against Allwyn UK in relation to that milestone.”

Allwyn defends position on good causes

The article in The Times also made reference to funding to good causes from National Lottery sales. However, Allwyn addressed this in a statement issued to iGB.

“Protecting and maintaining returns to good causes at £1.6 billion ($1.2 billio) in our first year of operation has been a success and we continue to do everything we can to protect returns,” Allwyn said.

“It’s also worth noting that, over the course of the Fourth National Lottery Licence, good causes also receive a larger proportion of every ticket sold than under the Third Licence, including through a fixed contribution payable by Allwyn to Good Causes annually.

“So, we remain confident our plans will deliver on our ambition to double weekly returns to Good Causes from £30 million a week to £60 million by the end of the licence.”

Legal battles continue to stunt progress for Allwyn

While not addressed directly by Allwyn, the group is said to have blamed ongoing legal challenges for progress delays.

In securing the licence, Allwyn became only the second entity to run lottery since its launch in 1994. It replaced incumbent Camelot, which had also bid for the licence along with The New Lottery Company, owned by Health Lottery operator Northern and Shell and Italy’s Sisal.

First, Camelot issued a legal challenge, arguing the commission had not been forthright in its communication. This led to the High Court automatically suspending the licence decision.

Camelot eventually withdrew its challenge following media reports money for good causes could be at risk in a lengthy case. Incidentally, Allwyn later acquired Camelot UK, which operated the National Lottery, in February 2023. It also acquired Camelot Lottery Solutions (Camelot LS).

International Game Technology also pursued a claim for damages over how the change in licensee would impact its business. This was eventually withdrawn and the group agreed to a new technology partnership with Allwyn.

However, one legal challenge that remains in play is that of media mogul Richard Desmond. His company, Northern & Shell, is seeking damages over claims that the regulator’s process was unlawful. A High Court case is due to take place later this year.