Camelot withdraws appeal over lifting of automatic suspension but will pursue damages claim over National Lottery licence award

Incumbent operator Camelot has withdrawn its appeal over the High Court’s decision to lift the automatic suspension preventing the Gambling Commission from awarding the fourth National Lottery licence to a rival bidder, Allwyn Entertainment UK.

In July this year the Court of Appeal granted Camelot and technology provider IGT permission to appeal the High Court’s decision.

As a result of permission to appeal being granted the automatic suspension remained in place.

The Gambling Commission said that on Monday (5 September 2022) it received correspondence from Camelot indicating that it intended to withdraw its appeal and pursue its claim in damages only.

The Commission added that it was not aware that IGT’s position had changed and therefore the IGT appeal and the suspension would continue until that was resolved.

“Resolution of the appeal would allow us to proceed with the important work of formally awarding the licence to Allwyn,” it said.

“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.”

The Commission said: “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 do not intend to comment further at this stage.”

A Camelot spokesperson said: “By pursuing the opportunity to be awarded the fourth licence, Camelot has sought to limit the risk that Good Causes or the Exchequer would have to meet damages if the licence award was found by a Court to have been unlawful.

“However, it has become clear that the potential damages covered by the undertakings needed for the appeal to proceed would have been too large, and involved too great a commercial risk, for it to be reasonable to provide them.

“For that reason, Camelot has decided to withdraw its appeal in relation to the lifting of the suspension and Allwyn has agreed not to pursue any damages against Camelot in relation to the undertakings given in July. Camelot is no longer seeking to prevent the Enabling Agreement being signed prior to the Procurement Trial which will now take place in January/February.”

The spokesperson added: “In accordance with its duties as the operator of the third Lottery licence, Camelot will now cooperate with Allwyn and the Gambling Commission to facilitate an orderly transition to the fourth licence.”

The Court of Appeal published its permission decision in July in Camelot UK Lotteries Ltd & Anor v Gambling Commission & Ors [2022] EWCA Civ 1020.

The Court (Lord Justice Coulson and Lord Justice Snowdon) said: 

"3. The principal test is whether the grounds of appeal have a real prospect of success. That is CPR 52(6)(i)(a). That is a relatively low threshold.

4. Having considered the documents, and having heard the arguments, we have concluded that the applications for permission to appeal made by the Camelot companies have met that threshold in this case, and therefore, subject to the other points which we shall come on to, we grant them permission to appeal.

5. On the face of the material, we are less persuaded by IGT's submissions. However we have concluded that they too should be granted permission to appeal. There are two specific reasons for that. One is that we do not consider that it is appropriate at this stage to grant permission to one group of claimants and to deny it to another, when some at least of the challenges overlap.

6. The second point is that we are persuaded that there is here what CPR 52(6)(i)(b) calls "some other compelling reason for the appeal to be heard". Why do we say that? First, there is a dearth of appellate guidance on the correct approach to applications to lift the suspension (or to maintain the suspension) relating to the award of contracts, where the procurement process has been challenged. There are often two conflicting interests: the need to do justice, and the need for speed. In our view, the arguments, both this morning and indeed this afternoon, demonstrated the potential importance of such guidance.

7. We acknowledge Ms Hannaford's point that the Procurement Bill sets out provisions on this issue which use different words and terminology from those currently used by the courts, but – as a number of commentators have pointed out - it by no means follows that, even assuming that the Bill stays in this form, the test that will be applied by the courts will be very different to that which is currently applied. So we do not consider that the opportunity to give guidance is an academic exercise.

8. In addition, on the "some other compelling reason" point, it is important to be realistic. It is impossible not to acknowledge the significance of the Fourth Licence to run the National Lottery, which lies at the heart of the case, and the millions of pounds which the Lottery provides each week for good causes. That also suggests that these issues should be tried at a full hearing.

9. In consequence of the importance of this procurement exercise, this will become a flagged appeal. That means that it will be heard by the Master of the Rolls, possibly sitting with one or both of us...."