IGT Sues UK Gambling Commission Over Partner Camelot’s Failed Lottery Bid

Posted on: April 25, 2022, 10:01h. 

Last updated on: April 25, 2022, 04:24h.

IGT is the latest litigant hoping to overturn the UK Gambling Commission’s decision to award Britain’s £80 billion (US$108 billion) National Lottery contract to Allywn Entertainment.

A child stands near an advertisement for the National Lottery, above. IGT claims the bidding process was flawed and wants damages for loss of profit and the costs associated with the failed Camelot bid. (Image: Financial Times)

IGT claims the UKGC violated its obligations to provide a fair and transparent procurement process, according to court filings published in the Times of London.

Camelot has also made a similar allegation in a separate lawsuit. Another defeated bidder, British billionaire Richard Desmond, launched his own legal challenge earlier this month.

The global gaming giant is a technology partner with Camelot. The company booted off the contract after 28 years of uninterrupted operations.

Bending the Rules

Both the Camelot and IGT lawsuits are centered around the allegation that the UKGC “changed the rules” in the final weeks of the process. The Telegraph claims that a “risk factor” discount of up to 15% was supposed to be applied to the financial projections made by each bidder.

This was initially factored into the bids, which would have made Camelot the winner. But it was scrapped in the final adjudication, according to The Telegraph.

Allwyn claimed it would raise £38 billion (US$50 billion) for good causes, a far greater amount than Camelot projected in its bid and, therefore, arguably riskier. While certain details of the bids and final scores were shrouded in secrecy, the IGT lawsuit reveals that Allwyn scored 87.2% and Camelot 85.7%. Both scored a “risk factor” of zero.

“It is implausible that both bidders could rationally… have received the same score of 0 percent,” IGT asserts in its lawsuit.

IGT wants the UKGC decision overturned. It also wants to be paid damages for profit loss and costs associated with supporting the Camelot bid.

Russia Controversy

Controversy around the decision amped up a notch last week after The Mail on Sunday reported that the chair of the UKGC committee that evaluated the bids had been strangely cagey about his ties to Russia’s financial sector.

Stephen Cohen, chair of the National Lottery Competition Committee (NLCC), ran the hedge fund arm of Troika Dialog, once described as “the Kremlin’s preferred investment bank,” working under Andrey Sharonov, Putin’s former deputy economic minister.

But this detail was not mentioned in his biography on the UKGC website nor his LinkedIn page and was also omitted from the government announcement of his appointment in 2020

Meanwhile, Saska is owned by the Czech oil and gas tycoon Karel Komarek, who also has business ties to Russia.

In 2016, Kormarek’s company, MND, built an underground gas storage facility in the Czech Republic in partnership with Russian state-controlled energy giant Gazprom.

Kormarek has publicly condemned Russia’s invasion of Ukraine.