Allwyn, the Czech-based company that is set to take over the UK National Lottery, has agreed to buy the current operator Camelot in a deal which will ease the handover of the lottery licence and end legal wrangling over the procurement process.
The deal is expected to close early next year, pending approval from the Gambling Commission, the UK’s gaming regulator. Allwyn bought Camelot from the Ontario Teachers’ Pension Plan, which has owned the business for 12 years, for around £100mn, according to a person familiar with the matter.
Allwyn won the contract to operate the next National Lottery licence in March, becoming the first operator to replace Camelot in the lottery’s 28-year history. But the handover process was put on hold because of a legal challenge brought by Camelot against the Gambling Commission, which was eventually dropped in September.
Robert Chvátal, Allwyn’s chief executive, said the acquisition “strengthens the transition process and helps support Allwyn in achieving its vision for the National Lottery,” following months of delay to the handover of the lottery operations.
The Gambling Commission had argued in court that the delayed handover could have harmed fundraising for good causes.
Camelot had planned to pursue financial damages over the way in which the Gambling Commission handled the bidding process in a High Court case scheduled for early next year, but the legal challenge will be withdrawn following the takeover.
Chvátal said the deal would “ensure the successful delivery” of the National Lottery both next year and when Allwyn, Europe’s biggest lottery operator, takes over the running of the lottery in February 2024.
Camelot will continue to be run separately, but most of Camelot’s 900 staff were already set to transfer to Allwyn as part of the handover of the lottery licence.
The lottery is one of the UK government’s most lucrative procurement contracts and the 10-year licence is projected to generate up to £100bn in sales for Allwyn. In the year to the end of March, Camelot reported sales worth £8.1bn.
Since its inception in 1994 the lottery has generated £46bn for good causes, including UK Sport, which supports athletes preparing for the Olympic and Paralympic Games, the Arts Council and the British Film Institute.
As part of its winning bid, Allwyn which changed its name from Sazka Group during the bidding process, pledged to halve ticket prices to £1, double the amount of money generated for good causes and invest heavily in new digital products.
In September, Allwyn, which is owned by Czech billionaire Karel Komárek, called off plans to float on the New York Stock Exchange via a blank cheque company run by Gary Cohn because of unfavourable market conditions.