Why Camelot running out of luck is end of an era in Scotland as Czech firm set to take over running of National Lottery

It has funnelled billions of pounds to good causes and helped some of Scotland’s most celebrated athletes reach the summit of their sports.

But after nearly three decades, Camelot’s luck has finally run out.

The long-standing operator of the National Lottery is set to lose its licence after the Gambling Commission announced plans to transfer it to a rival.

Allwyn, a Czech firm owned by an oil and gas tycoon, has emerged triumphant following a fiercely contested, four-way bidding battle to take over the competition.

As part of its successful bid, it has pledged to donate £38 billion to good causes over the next decade, but there are question marks over its owner’s ties with Gazprom, the energy firm that counts the Russian government as its majority owner.

The commission said Allwyn has committed to investment in the National Lottery that is expected to “deliver growth and innovation,” with “increased contributions to good causes”.

It said it was content the firm was a fit and proper operator of the National Lottery, adding: "Recognising our role as a responsible regulator, we are also satisfied that no application is impacted by sanctions related to the conflict in Ukraine."

The change means Allwyn will assume responsibility for the day-to-day operations of draws from the beginning of February 2024, the 30th-anniversary year of the lottery.

Camelot has expanded the number of games it runs since taking control of the National Lottery at its inception in 1994. Picture: Shutterstock

Since its launch in 1994, the lottery has contributed around £3bn to good causes across Scotland, with more 63,000 community, arts, heritage, and sports projects benefiting from the windfall.

There have been major investments, such as the £19 million that went towards the creation of the V&A Dundee, the £18m to help finance the restoration of the National Museum and Scotland, the £3.5m awarded to the islanders of Gigha towards their community buyout.

But the success of the initiative is felt far and wide in cities, towns and villages across the country. Over half of those projects who have benefited received money via the National Lottery Community Fund, which has paid out more than £1.15bn to date.

The first in Scotland to benefit was the charitable trust that operates the Glasgow Science Centre; one of the most recent was Backbone, a leading black, Asian, and minority ethnic outdoor environmental education organisation.

Crucially, lottery funding has been a major resource for grassroots and elite sport across Scotland, with the money central to bankrolling the training regimes of Olympic champions such as Sir Chris Hoy. The most recent accounts for sportscotland, for example, show it received nearly £26m in lottery money last year – almost half of its total funding.

Justin King, the chair of Allwyn in the UK, said its successful bid would ensure such contributions continue under the new decade-long licence.

“The National Lottery is a vital British institution and we’re focused on ensuring it plays an even bigger part in society by increasing participation, improving safeguards, and giving back more to good causes,” he said.

The Gambling Commission’s chief executive, Andrew Rhodes, said: "In its lifetime, the National Lottery has raised more than £45bn for good causes and is rightly seen as a great national asset.

"I am confident that the success of the competition will lead to a highly successful fourth licence – one that maximises returns to good causes, promotes innovation, delivers against our statutory duties, and which ultimately protects the unique status of the National Lottery.”

But Camelot chief executive Nigel Railton said: "I'm incredibly disappointed by today's announcement, but we still have a critical job to do – as our current licence runs until February 2024.

"We're now carefully reviewing the Gambling Commission's evaluation before deciding on our next steps."

It remains to be seen what the change will mean in practice for the millions of people who regularly play the lottery. Allwyn has proposed reducing ticket prices from £2 to £1 and staging two draws on one night.

The firm, owned by Czech businessman Karel Komarek and previously known as Sazka Entertainment, operates across Europe including in Austria, the Czech Republic, Greece and Cyprus, and Italy.

It has emerged another of Mr Komarek's companies – MND (Moravske Naftove Doly) – formed a joint venture with Gazprom to build an underground gas storage facility in his home country, which opened in Moravia in 2016.

In an open letter published earlier this month, the businessman said Russia’s invasion of Ukraine was a "senseless act of aggression that must be condemned in the strongest possible terms" and described himself as a "very public critic" of Russian president Vladimir Putin.

He said: "I took the decision many years ago to divest and exit from Russian assets with the exception of a shareholding in a gas terminal, which we have been trying to exit for a number of years and a 50/50 joint-venture with Gazprom on an underground gas storage facility in the Czech Republic.”

It is understood Mr Komarek is in talks with the Czech government to nationalise the facility and remove Gazprom’s ownership.

While Camelot is only allowed to keep 1 per cent of the money generated from players, its stewardship of the lottery has been a profitable enterprise.

The company’s accounts show in the 12 months to March 2021, it made a pre-tax profit of £95m on sales of £8.4bn.

Four years ago, MPs on the Public Accounts Committee criticised the firm for increasing its funding to good causes by just 2 per cent between 2009/10 and 2016/17, while its profits had increased by 122 per cent over the same period. .

The new lottery licence will force Allwyn to keep profit growth in line with donations.

A message from the editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven't already please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.