International Game Technology Plc v The Gambling Commission
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson |
| Judgment Date | 28 July 2023 |
| Neutral Citation | [2023] EWHC 1961 (TCC) |
| Court | King's Bench Division (Technology and Construction Court) |
| Docket Number | TCC Claims No: HT-2022-000113 |
and
[2023] EWHC 1961 (TCC)
Lord Justice Coulson
TCC Claims No: HT-2022-000113
HT-2022-000420
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Philip Moser KC, Ewan West, Jen Coyne & Cliodhna Kelleher (instructed by Osborne Clarke LLP) for the Claimants
Sarah Hannaford KC, James Neill, Rose Grogan & Barney McCay (instructed by Hogan Lovells LLP) for the Defendant
Charles Hollander KC, Joseph Barrett & Malcolm Birdling (instructed by Quinn Emanuel Urquhart & Sullivan LLP) for the Interested Parties
Hearing Dates: 26–28 June 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 28 July 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives
INTRODUCTION
These proceedings are concerned with a procurement challenge arising out of the Competition for the Fourth Licence to run the National Lottery. This Judgment is confined to the Preliminary Issue ordered by O'Farrell J at the Case Management Conference held on 3–4 May 2023. It is designed to resolve the question of the standing of the IGT Claimants (to whom I shall collectively refer as “IGT”). The Defendant, the Gambling Commission (“the Commission”) and the Interested Parties (to whom I shall collectively refer as “Allwyn”) both say that, because IGT did not bid for the Fourth Licence, and were instead at best sub-contractors to Camelot (one of the unsuccessful bidders), they have no standing to bring this claim. This is an issue on which there is no authority directly in point, and its resolution may have an impact beyond the confines of this case.
There are Agreed Facts concerned with the status and role of each of the IGT companies. Although some further written evidence on the same topic was adduced by IGT, save for one discrete point, its relevance was unclear and no specific factual issues were identified to which that material might have gone. Accordingly, save for that one point (addressed in paragraphs 181–184 below), I consider that, for the purposes of this judgment, it is unnecessary to go outside the Agreed Facts.
As is often the case in procurement challenges, it is necessary to have in mind issues of confidentiality. However, I have concluded that there is nothing in this Judgment which is confidential. The only relevant matter which had been suggested as being confidential, namely the number of sub-contractors identifiable in the Camelot bid, cannot be confidential, and that became common ground at the hearing. I have therefore referred to those numbers below. I have not identified the particular items of equipment or services which the various IGT Claimants were to provide to Camelot if their bid was successful, because I am told that that information too is confidential. Although I consider that such a suggestion borders on the absurd, nothing turns on those details.
I am extremely grateful to counsel for all three parties for the clear and comprehensive nature of both their written and oral submissions.
THE FACTUAL BACKGROUND
The Competition for the Fourth Licence
The Commission commenced a Competition for the Fourth National Lottery Licence on 31 August 2020, by way of a concession notice inviting expressions of interest, published in the Official Journal of the European Union. An Invitation To Apply (“ITA”) was published on 26 October 2020. The relevant Regulations governing that competition are the Concession Contracts Regulations 2016 (“CCR16”). Following Brexit, the CCR16 were amended 1 with effect from the Implementation Period (“IP”) completion day on 31 December 2020. As the date of the Competition preceded the IP completion date, all parties are agreed that the unamended CCR16 apply to this case.
The ITA divided the procurement into two Phases, “in order to provide all applicants with an equal opportunity to refine their Application…”. Applicants were “required to provide a full response to the ITA at both phases”. During Phase 1, applicants received briefings, clarification sessions and feedback and were required to submit a qualitative and financial response, a Phase 1 presentation, a proposed game portfolio, feedback on the proposed form of licence and feedback on the implementation and transition documents. During the Phase 1 process, applicants made presentations and received written feedback.
There were four applicants. One was Camelot UK Lotteries Ltd (“Camelot”) who at the time of the competition was the incumbent provider of the National Lottery pursuant to the Third National Lottery Licence. Another was The New Lottery Company (“TNLC”); another was Allwyn and the final applicant was Sisal. IGT was not an applicant.
During the Phase 2 response period, the four applicants were entitled to raise and receive clarifications, and were required to submit another qualitative and financial ITA response, a Phase 2 presentation, a proposed game portfolio, a submission on ancillary activities and a completed long form trust deed.
Finally, the applicants were required to execute a Deed of Commitment. This contained binding commitments in the event that the particular applicant's application was successful. This obliged them to “enter into the Proposed Licensee Enabling Agreement and Cooperation Agreement…relating to the implementation of the Application”. They were required to irrevocably undertake to the Commission that unless and until the competition lapsed, their proposals would remain valid and open for acceptance for a period of 12 months. There were also various obligations which were triggered “in the event of an award notification”.
On 15 March 2022, the four applicants were notified of the outcome. Allwyn was the winner. Camelot was the second-placed bidder.
The IGT Claimants
As I have said, none of the IGT Claimants submitted a Phase 1 or a Phase 2 Application for the Fourth National Lottery Licence. The Agreed Facts in respect of each of the Claimants are set out in paragraphs 12, 13, 14, 16 & 17 below. C2 is no longer a party to these proceedings.
(a) The First Claimant: International Game Technology PLC (“C1”)
C1 is established and incorporated in the United Kingdom and is registered in England and Wales. It is the parent company of the IGT group. It directly owns C4 and indirectly owns all of the other Claimants. C1 does not provide any services under the Third National Lottery Licence and it was not intended that C1 would provide services to Camelot under the Fourth Licence. Income streams from, and costs incurred by, the other Claimants are consolidated in C1's consolidated accounts.
(b) The Third Claimant: IGT Global Solutions Corporation (“C3”)
C3 is a company established and incorporated in and has its registered address in the state of Delaware, USA, and its principal business office in Providence, Rhode Island, USA. It is a Key Sub-contractor under the Third National Lottery Licence. It was identified as a Key Sub-contractor in Camelot's Phase 1 and Phase 2 Applications, was a party to the Heads of Agreement with Camelot dated 25 September 2020, as subsequently amended and supplemented (“HoA”) and was to sell equipment to Camelot under the Fourth Licence.
(c) The Fourth Claimant: IGT (UK3) Limited (“C4”)
C4 is established and incorporated in the United Kingdom and is registered in England and Wales. As required under the Selection Questionnaire it was formed as a special purpose entity for the purposes of bidding as an applicant to be an operator of the National Lottery in the Competition. C4 registered its interest and received a copy of the Selection Questionnaire, published on 28 August 2020. C4 submitted a Selection Questionnaire response as an Applicant and duly pre-qualified, meaning that C4, taking account of the identity and role of Persons Relevant, was evaluated by the Commission as having the appropriate technical and professional capability, and financial and economic standing, to be an operator of the Fourth Licence. On 20 October 2020 C4 was sent the ITA by the Commission. C4 withdrew from the Competition on 5 February 2021, prior to the stage at which initial Phase 1 applications were submitted for the Fourth Licence. C4 was not intended to provide services to Camelot under the Fourth Licence.
There was some further material, relevant to C4 which was outside the Agreed Facts but which was relevant to one way in which Mr Moser KC put the case during his oral submissions. I deal with that issue in paragraphs 181–184 below.
(d) The Fifth Claimant: IGT UK Limited (“C5”)
C5 is a company established and incorporated in the United Kingdom and is registered in England and Wales. It was identified as a Key Sub-Contractor in Camelot's Phase 1 and Phase 2 Applications, and was a party to the HoA and was to provide services to Camelot under the Fourth Licence.
(e) The Sixth Claimant: IGT UK Limited (“C6”)
C6 is a company established and incorporated in the United Kingdom and is registered in England and Wales. It was not identified as a sub-contractor in Camelot's bid.
There was a good deal of debate about the position of C6 in the inter-solicitor correspondence, as well as some limited evidence in the second statement of Tracey Robinson dated 2 June 2023. The short point was that C6 was not known to the Commission (because it was not identified as a...
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