The High Court has today ruled that the automatic suspension of the process for awarding the Fourth National Lottery Licence to Allwyn Entertainment UK, triggered when Camelot issued proceedings to challenge the procurement process, should be lifted. The Gambling Commission can now start the formal process of implementing its decision announced on 15 March 2022 that Allwyn was the Preferred Applicant.
The High Court had previously rejected an application by Camelot UK for an expedited hearing of its claim that the competition process was flawed. The substantive hearing of Camelot’s claims along with those of its main supplier, IGT, are likely to be heard later this year.
In May the Gambling Commission applied to the High Court for a ruling lifting the suspension so that it could proceed with implementation. The legal process is known as a 'balance of convenience application'. This requires the court to be satisfied that damages would be the appropriate remedy for the aggrieved party regardless of the final outcome of the case.
Mrs Justice O'Farrell found: “Having carefully considered all the evidence on this issue, it is clear that the loss of Camelot UK’s business can be quantified. Its sole purpose as a corporate entity (created as a Special Purpose Vehicle for the Third Licence competition) is to operate the National Lottery under the third licence. It provided its projected revenue and profit over the term of the Fourth Licence in its application. Therefore, any losses flowing from the loss of the Fourth Licence, and the business as a whole, are readily quantifiable.”
Mrs Justice O’Farrell concluded that “damages would be an adequate remedy for Camelot and it is just that it should be confined to such remedy.” She also reached the same conclusion in relation to IGT.
Having determined that damages were an adequate remedy for both claimants and having received the requisite assurance from the Gambling Commission and the Department of Culture, Media and Sport that arrangements would be made to pay such damages, Mrs Justice O’Farrell went on to consider the balance of convenience in lifting the suspension, as opposed to the delay to the start of the Fourth Licence, if the formal award of the licence could not commence before the hearing of the substantive claims and any subsequent appeal. She said:
"153. 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.
"154. 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.
"155. 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.”
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.
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