Camelot to challenge Czech billionaire’s National Lottery win

Camelot will this week launch a High Court challenge over claims Britain’s gambling regulator broke the law in its decision to award Czech billionaire Karel Komarek the lucrative contract to run the National Lottery.

The Telegraph understands that the incumbent National Lottery operator will issue legal proceedings against the Gambling Commission in the coming days. They will include a judicial review as well as a High Court procurement challenge.

At the heart of Camelot’s case is expected to be allegations that the regulator changed the rules after Camelot came out top in a scoring system designed to measure the bids.

A “risk factor” discount of up to 15pc was due to be applied to financial projections by the bidders. Camelot is expected to claim that a discount was initially applied by the regulator, but later changed to zero in the final adjudication.

The change proved crucial because the financial projections lodged by Allwyn, Mr Komarek’s gambling group, projected raising £38bn for good causes, billions more than was proposed by Camelot.

A spokesman for Camelot declined to comment.

The switch is believed to have even surprised Allwyn, which had filed its own legal proceedings against the Gambling Commission days before it was unveiled as “preferred bidder” on Mar 15.

A legal battle would prevent Allwyn from signing the contract to run the National Lottery.

Separately, gambling minister Chris Philp is seeking fresh assurances from the Gambling Commission about Mr Komarek’s business ties to Russian energy giant Gazprom, the Kremlin-controlled gas producer.

In response to a question from Labor shadow minister Alex Davies-Jones over concerns about the future National Lottery operator having ties to Gazprom, Mr Philip said: “I have asked the commission to assure me that it has conducted thorough inquiries to establish that the provisional license awardee meets the test, and it has given me that assurance.

“There are also arrangements for the proposed license holder to undergo the UK secure vetting process, and that work will begin shortly.”

Mr Komarek, who has an estimated net worth of $7.8bn (£5.9bn), operates a vast gas storage facility in the Czech Republic in a joint venture with Gazprom. He is in talks with the Czech government to oust Gazprom and has denounced “the barbarism of Vladimir Putin’s regime”.

The Gambling Commission did not comment on the additional checks on behalf of the Government nor the vetting. It said earlier this month: “We are also satisfied that no application is impacted by sanctions related to the conflict in Ukraine.” A spokesman for Allwyn said that it was for the regulator to respond.

An intervention by Conservative MP Julian Knight, the chairman of the House of Commons Digital, Culture, Media and Sport Committee, is likely to be scrutinized in Camelot’s legal challenge.

Mr Knight wrote to the Gambling Commission warning officials that the application of a risk factor gave incumbent operator Camelot a significant advantage. The correspondence followed a report by the Telegraph that Camelot had scored ahead of Allwyn in the initial analysis by the regulator.

The Gambling Commission declined to comment on threatened legal proceedings by Camelot.

When selecting Allwyn as preferred bidder earlier this month, Andrew Rhodes, Gambling Commission chief executive, said: “I am confident that the success of the competition will lead to a highly successful fourth license – one that maximizes returns to good causes, promotes innovation, delivers against our statutory duties, and which ultimately protects the unique status of the National Lottery.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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