Camelot will challenge the Czech billionaire’s victory in the national lottery Business

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

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

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

A “risk factor” discount of up to 15% was to be applied to bidders’ financial projections. Camelot is expected to claim that a discount was initially applied by the regulator, but then reduced to zero in the final auction.

The change proved crucial as financial projections filed by Allwyn, Mr Komarek’s gambling group, called for raising £38billion for good causes, billions more than Camelot was offering.

A Camelot spokesperson declined to comment.

The change is believed to have surprised even Allwyn, who had filed his own lawsuit against the Gambling Commission days before being unveiled as “preferred bidder” on March 15.

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

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

In response to a question from Labor shadow minister Alex Davies-Jones about concerns over the future National Lottery operator with links to Gazprom, Mr Philip said: ‘I have asked the committee to make sure that it conducted extensive investigations to establish that the provisional licensee met the test, and that gave me that assurance.

“There are also provisions for the proposed licensee to undergo the UK’s secure verification process, and this work will begin shortly.”

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

The Gambling Commission has not commented on the additional checks carried out on behalf of the government or the verification. He said earlier this month: “We are also pleased that no apps are affected by sanctions related to the conflict in Ukraine.” A spokesperson for Allwyn said it was up to the regulator to respond.

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

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

The Gambling Commission declined to comment on Camelot’s legal action threats.

When selecting Allwyn as the preferred bidder earlier this month, Andrew Rhodes, Chief Executive of the Gambling Commission, said: “I am confident that the success of the competition will lead to a very successful fourth license – one that maximizes returns to good causes, promotes innovation, meets our legal obligations and ultimately protects the unique status of the National Lottery.

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This notice was published: 2022-03-26 15:00:00

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