Camelot UK Lotteries Ltd v The Gambling Commission
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell,Mrs Justice O'Farrell DBE |
| Judgment Date | 29 June 2022 |
| Neutral Citation | [2022] EWHC 1664 (TCC) |
| Docket Number | HT-2022-000106 HT-2022-000154 |
| Court | Queen's Bench Division (Technology and Construction Court) |
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[2022] EWHC 1664 (TCC)
Mrs Justice O'Farrell DBE
HT-2022-000106
HT-2022-000113
HT-2022-000154
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building
Fetter Lane, London, EC4A 1NL
Lord Pannick QC, Jason Coppel QC, Ligia Osepciu and Daniel Cashman (instructed by Linklaters LLP) for the Claimants in HT-2022-000106 & HT-2022-000154
Philip Moser QC, Ewan West and Jen Coyne (instructed by Osborne Clarke LLP) for the Claimants in HT-2022-000113
Sarah Hannaford QC, Anneli Howard QC and Will Perry (instructed by Hogan Lovells International LLP) for the Defendant
Helen Davies QC, Joseph Barrett and Malcolm Birdling (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the Interested Parties
Hearing dates: 11 th & 12 th May 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii. The date and time for hand-down is deemed to be Wednesday 29 th June 2022 at 10.30am
These proceedings arise out of a competitive tender for the award of a statutory licence for operation of the National Lottery (“the Fourth Licence”) for the purpose of generating funds for distribution to good causes.
There are two matters before the Court for immediate determination. The defendant in each claim (“the Commission”) applies for an order to lift the automatic suspension which arose on issue of a procurement challenge by the claimants in claims HT-2022-000106 (“Camelot UK”) and HT-2022-000154 (“Camelot Global”), collectively referred to as “Camelot”, and the claimants in claim HT-2022-000113 (“IGT”), pursuant to regulation 57(1)(a) of the Concession Contracts Regulations 2016 (“the CCR”).
Camelot and IGT oppose the applications and seek to maintain the suspension, preventing the Commission from awarding the Fourth Licence to the successful applicant in the competition, Allwyn Entertainment Limited (“Allwyn”), pending the outcome of the trial.
There is also an application by Camelot and IGT for an expedited trial in October 2022, so that the claims may be resolved by the end of the year, minimising any delay to implementation of the Fourth Licence.
The Commission does not oppose the application for expedition but considers that a trial in October 2022 would be challenging and would not avoid the detriment suffered by the Commission by continuation of the suspension in the meantime. Its position is that a timetable leading to a trial in January 2023 would be more realistic.
The interested parties, Allwyn and SAZKA Group a.s (“the Allwyn Parties”), support the Commission's application to lift the suspension. Their position is that the trial of the claims should take place as quickly as is achievable but they do not consider that a final resolution could be achieved without a significant and material delay to implementation of the Fourth Licence without lifting the suspension.
There are further applications concerning joinder of claims, case management of the claims and amendments to the common confidentiality ring order (“the CCRO”). They will be considered by the Court to the extent that they have any impact on the applications to lift the suspension and for expedition but will be determined at a later hearing following this judgment, if not resolved by agreement.
Background
Camelot UK is a special purpose vehicle which is a wholly-owned subsidiary of the Ontario Teachers' Pension Plan (“OTPP”).
Camelot Global is a member of the same corporate group as Camelot UK. It licenses or supplies digital lottery platforms and provides retailer technology solutions to companies including Camelot UK.
The IGT Claimants are part of the IGT Group, which provides lottery and gaming technology products and services to operators across the world.
Allwyn is a lottery operator with market positions across various countries in Europe. Sazka Group AS is Allwyn's parent company.
The Commission is an independent statutory body responsible for awarding the licence to run the National Lottery and regulating the licensee. Both of these functions are governed by the National Lottery etc. Act 1993 (“the NLA”).
The overriding duties of the Commission are set out in section 4 of the NLA:
“(1) The Secretary of State [for the Department of Digital, Culture, Media and Sport] and (subject to any directions he may be given by the Secretary of State under section 11) the Commission shall each exercise their functions under this Part in the manner they consider the most likely to secure –
(a) that the National Lottery is run, and every lottery that forms part of it is promoted, with all due propriety, and
(b) that the interests of every participant in a lottery that forms part of the National Lottery are protected.
(2) Subject to subsection (1), the Secretary of State and the Commission shall each in exercising those functions do their best to secure that the net proceeds of the National Lottery are as great as possible.”
Section 5 of the NLA empowers the Commission to authorise by licence one person at any one time to run the National Lottery, provided that the Commission is satisfied that such person is a fit and proper person to run the National Lottery.
Section 7 of the NLA states:
“(1) A licence granted under section 5 or 6 shall be in writing and shall specify the period for which (subject to being revoked or suspended) it is to have effect.
(1A) The period specified under subsection (1) must–
(a) begin with the date of grant of the licence, and
(b) not exceed 15 years.
(1B) A licence granted under section 5 or 6 may (subject to the restriction in subsection (1A)(b)) include–
(a) provision enabling the period specified under subsection (1) to be extended by the Commission;
(b) provision enabling the period specified under subsection (1) to be extended by agreement between the Commission and the licensee.”
Funds generated by the National Lottery are paid into a distribution fund and apportioned to causes connected with the arts, sport, national heritage, charities, health, education and the environment. Since the National Lottery was launched in 1994, it has raised more than £45 billion for good causes. It currently raises around £1.7 billion a year, funding a wide range of public interest activities, from large scale projects, such as the 2012 Olympic and Paralympic Games, to local community projects such as foodbanks and children's centres. In addition, 12% of the price of all lottery tickets is paid to the Treasury in the form of lottery duty.
The first licence for the National Lottery was awarded to Camelot UK in 1994. The second licence was also awarded to Camelot UK. On 1 February 2009 Camelot UK was granted the third licence for an initial 10-year period. The third licence was extended on three occasions and will expire on 31 January 2024. As a result of those extensions and the statutory longstop of 15 years, no further extension of the third licence is permitted under the NLA.
The Competition
By publication of Concession Notice Reference Number 2020/S 168-408296 dated 31 August 2020, in the Official Journal of the European Union, the Commission invited expressions of interest in a licence, to be issued pursuant to section 5 of the NLA, for operation of the National Lottery for a period of 10 years, with an estimated total value of £6,473,100,000.
On 26 October 2020, following the initial selection questionnaire stage, Camelot UK was one of the applicants who received an invitation to apply for the Fourth Licence (“the ITA”). The executive summary of the ITA stated:
“The Commission seeks to award the Fourth Licence to the Proposed Licensee identified in the Phase Two Application which proposes the highest credible and deliverable Good Causes Contribution for the Fourth Licence whilst first ensuring support for the Commission's Statutory Duties of propriety and protecting Participants' interests.”
The ITA stated that the successful applicant would be awarded the Fourth Licence, to operate the National Lottery for a period of ten years. The proposed licensee had to be a special purpose entity established in the UK.
Each applicant was required to submit a detailed incoming transition plan, setting out how it would manage the transition from the third licence to the Fourth Licence, meet the requirements for operating the Fourth Licence and implement its business plan. The transition plan was required to be fully costed, including details for all resources to be used in the transition, subjected to a risk assessment and demonstrably executable.
The ITA stated that the successful applicant would be required to enter into additional agreements, including:
i) a Deed of Commitment, under which the Preferred Applicant would procure that the incoming licensee would execute the Enabling Agreement and the Deed of Adherence (if the successful...
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