Report: MPs warn good causes could lose up to £1bn due to National Lottery legal row

UK MPs have written to Culture Secretary Nadine Dorries urging her to step in to prevent up to £1bn being taken away from good causes due to the ongoing legal battle with prospective fourth National Lottery licensee Allwyn.

As reported by The Mail Online, MPs are concerned that the incumbent licence holder, Camelot, could receive massive damages from the ongoing High Court battle should Camelot emerge triumphant, monies which would go to its owner, the Ontario Teachers’ Pension Plan. Vicariously, if Camelot were to lose the case, or if the case were to become a protracted legal saga, Camelot could be forced to pay massive damages to the UK Gambling Commission and preferred bidder Allwyn

In the letter seen by the news outlet, the MPs, which include ex-Tory vice-chairman Ben Bradley and former Welsh Secretary David Jones, argue that any loss of money incurred by Camelot would be “an unacceptable cost to the British taxpayer”, especially during the current cost-of-living crisis.

The letter goes on to state that the National Lottery’s foundation is to help those most disadvantaged in society and that any decision made by Camelot’s owner to pursue compensation should not affect their constituents.

“Our constituents risk becoming collateral damage in an arcane legal battle in which there is no public interest and no winners. The company Camelot, owned by the Ontario Teachers’ Pension Plan, is taking legal action to overturn the result,” the letter states.

“Regardless of the strength or weakness of either side’s case, we are clear that attempting to squeeze up to £1bn out of the public purse at this time is totally unacceptable,” MPs added.

The group of MPs have stated their belief Camelot’s owners showed very little concern about its social role in the UK and referred to the fact that there had been a decline in the proportion of revenue given to good causes in recent years.

The warning of this potential expenditure came from former Camelot CEO Dame Dianne Thompson in May, when she said that the UK Gambling Commission should delay transferring the licence to Allwyn to avoid the good causes fund being hit.

Camelot has previously pledged to funnel approximately 95% of all sales revenue to winners and good causes, with 4% spent on operating costs and 1% retained as profit. However lottery ticket sales have declined dramatically over recent years, due to higher ticket costs and competition from other verticals. In its most recent set of financial results, Camelot reported a 3% drop in sales, saying that players had “tightened their belts” amid the cost-of-living crisis.

The issue of legal costs affecting returns to good causes was cited by former Gambling Minister Chris Philp last month in DCMS select committee hearings on the future of the National Lottery, with Philp suggesting that good causes could face a £600m bill to cover any damages awarded to Camelot as part of the legal challenge.

At a pre-trial hearing in May, Camelot argued that it would potentially have to make its entire UK workforce redundant and effectively its business would cease to exist, should the licence be awarded to Allwyn.

Allwyn has pledged £30bn to good causes over the course of its potential licence period should it be awarded. The firm is currently the UKGC’s preferred bidder, having beaten off competition from Camelot, Flutter Entertainment-owned Sisal and The New Lottery Company Ltd in March.