The UK Gambling Commission has launched a formal investigation into Allwyn Entertainment Ltd after numerous delays in delivering promised improvements to the National Lottery. The Czech-owned company took over the lottery franchise in February 2024 after winning the fourth licence competition against the previous operator, Camelot.
The review takes place against a backdrop of strong growth in the overall gambling industry. The UK Gambling Commission recently published operator data for the fourth quarter ending March 31, indicating that total gross gambling yield has been rising in tandem with the total number of bets. Britain’s licensed online gaming operators reported a total GGY of £1.45 billion in Q4, up 7% from the same period last year. In this thriving market, trusted casino sites have performed particularly well, with online wagers and spins up 5% to 25.2 billion, and monthly active accounts up to 13.5 million.
The clear distinction between the thriving commercial gambling sector and the challenges confronting the National Lottery’s new steward has increased scrutiny of the situation. The Commission is considering whether regulatory action is required in response to Allwyn’s failure to meet several key operational commitments.
Several deadlines specified in the licence agreement have been missed. The regulator was particularly concerned about Allwyn’s unfulfilled promise to reduce the main draw ticket price from £2 to £1, delays in technological platform upgrades, and slower-than-expected increases in funds allocated to charitable causes. The Commission takes these matters seriously, especially since Allwyn won the licence in part because of promises to transform the lottery through a significant £350 million investment in digital systems.
The Commission’s review also looks into the impact of ongoing legal disputes on Allwyn’s operational performance. Richard Desmond’s Northern & Shell, an unsuccessful bidder for the licence, has filed legal challenges, reportedly disrupting aspects of the transition from Camelot. Desmond’s lawyers have claimed that there were irregularities in the licensing process after they gained access to internal Commission documents following a recent court decision.
Financial reports from Allwyn’s first quarters of operation show charitable returns growing at rates lower than initial projections, raising concerns about the feasibility of meeting decade-long goals. The Gambling Commission has emphasised that all licence holders must strictly adhere to agreed operational standards and timelines, but it has not made any specific comments regarding the ongoing assessment.
The review could result in financial penalties or formal warnings if the Commission finds Allwyn has violated the licence terms. Such actions would be unusual for the regulator to take this early in a licence period.
The investigation has sparked interest from lottery customers across the country. Many community organisations that rely on lottery funding are concerned about developments, given the National Lottery’s critical role in supporting cultural, sporting, and charitable projects throughout the UK.
The Commission’s findings are expected in the coming months, and they may have an impact on the future operation of the National Lottery. Allwyn is currently under pressure to fulfil its obligations more quickly and to navigate the complex legal framework.
The results of this regulatory review will most likely determine whether additional oversight measures are required to ensure the National Lottery meets its public benefit mandate under Allwyn’s management.
