UKGC Extends Lottery Competition
The Gambling Commission has announced that it has extended the timelines for Phase Two of the competition for the fourth National Lottery license. The decision means that an extra four weeks will be added to the second phase of the application stage, in addition to six additional weeks for evaluation.
Camelot, which currently operates the National Lottery, has been granted an additional six months on its license.
©PauloDiniz/Pixabay
Extra Six Months for Camelot
The Gambling Commission has extended the National Lottery Competition process by ten weeks as a result of representations made by applicants as well as feedback on the first phase of the competition. The newly revised timetable will now include a four-week application stage and an additional six weeks to evaluate bids.
According to the Gambling Commission, which regulates the UK’s gambling industry and is responsible for running the competition, the changes to the competition are in the interest of applicants. The extra time will allow them to refine their proposals and give the regulator more time to assess them once submitted.
As a result of the changes, the announcement of the competition’s winner has also been pushed back. It was originally expected that the new lottery operator would be named in September or October 2021. Instead, the winner will be revealed in February 2022 and the next license period will start in February 2024. The fourth National Lottery license will run for ten years.
The regulator has granted the current holder of the third National Lottery license a further six months to operate. The extra time is intended help facilitate a smoother transition between Camelot and the next license holder. In a statement, the Commission explained
“Our job is to run the best competition we possibly can – one that is open and fair and results in the best outcome for players and good causes. We want to appoint a licensee that can build on the National Lottery’s legacy and find new opportunities for a sustainable and successful future.”
It added that while it intends to name its preferred applicant in February 2022, the competition process could still be subject to further change due to COVID-19. This is the second time that the competition has been postponed because of the pandemic, the first delay being in May 2020.
DCMS Launches Inquiry
Based on Camelot’s current profit takings, which amount to roughly 1% of revenue from draws, scratch cards and online instant-win games each week, the operator could stand to gain nearly £42 million in additional profit thanks to the extra six months on its license period.
The regulator is currently under scrutiny from the DCMS, which launched an inquiry into the competition process in July. The inquiry will also scrutinize the preferred applicant. It follows criticism over the Camelot’s returns for Good Causes, which have not increased at the same rate as its profits.
The Government has said that it will ensure that changes are made to how the lottery license is operated, to ensure that future contributions more closely align with profits. The DCMS Committee has invited written submissions, with a deadline in place of September 10th. Laying out its terms of reference, the committee is looking to address a number of key areas.
These include analyzing how effectively the competition fulfils the regulator’s objectives, as well as the impact that calculating returns for good causes has on distributing bodies and supported projects. Another question raised asks how a smooth transition between the two license periods can be achieved.
Finally, the DCMS asks what impact the outcome of the fourth National Lottery license competition will have on the UK’s broader lottery market. Announcing the inquiry, Committee Chair Julian Knight MP spoke about its ambitions. According to the minister, the government wants to ensure that the National Lottery, which has raised £43 billion for Good Causes since 1994, stays in capable hands. Knight added:
“Our concern is not only with the operation of the competition to find the next operator, but also with the Gambling Commission that is overseeing the process. Crucially we’ll be asking what measures will be in place to ensure that when profits rise, it’s not just the operator that benefits, but good causes too.”
Camelot Face Competition
Applicants were due to present their final bids to a committee in September. Following on from that, a preferred applicant would have been named later that month. However, it has been revealed that a number of the bidders asked for more time to prepare their proposals, due to the complexity of the license.
Previous bidders have said that extending the competition provides the incumbent operator, in this case Camelot, with an unfair advantage. That’s because the costs of competing go up the more the process is drawn out.
The competition is thought to be one of the most closely run yet, as bidders from around the world vie for one of the UK’s most lucrative government-awarded contracts. Since the lottery’s launch in 1994, Camelot has managed to fend off all other competitors, winning all three license competitions.
However, the Canadian owned operator has come under fire for not increasing its contributions to Good Causes at the same rate as its profits have increased. That negative press could cost it the competition, although it remains to be seen who the preferred candidate will be.
Camelot will face Allwyn, the UK branch of European lottery giant Sazka. It recently committed to eliminating its carbon emissions by 2030, in the hopes of becoming the world’s first net zero lottery company. Sir Keith Mills, who successfully organized the London Olympics, has been recruited to chair Allwyn’s bid.
Italian betting and gaming firm Sisal has partnered with BT and children’s charity Barnardo’s to support its bid. Northern & Shell, run by British newspaper mogul Richard Desmond, is also submitting a bid. Sugal & Damani, an Indian gambling firm, had expressed interest in the competition but has since retired its bid.
