Bidders prepare for National Lottery tender battle
A number of high-profile gaming businesses look set to compete in the tender process, which could see the contract to operate the UK National Lottery wrestled away from long-term incumbent Camelot for the first time.
While Camelot has operated the lottery since its inception in 1994, winning new contracts in 2001 and 2007, it looks set to face significant competition in the 2020 tender process.
Gambling Commission chief executive Neil McArthur has previously suggested there was “significant untapped potential” in the franchise, and that he hoped to see technology giants compete for the contract.
Fighting for the tender will be the likes of Health Lottery operator Northern & Shell. It told iGamingBusiness.com that after 25 years under Camelot’s control, it was “time for a change” to the lottery’s management when the current contract expires in 2013.
Northern & Shell, which previously owned a number of national newspapers including the Daily Express and Daily Star, has assembled a team to manage its bid, and has already received the draft invitation to apply (ITA) from the tender managers.
It pointed out that having run the Health Lottery since 2011, it was the only other provider to have a national retail presence in the UK, which it said would give it an advantage over challengers.
It expects that bids will be filed in March 2020, with the final decision of the tender panel being announced towards the end of the year.
Czech gaming conglomerate Sazka Group, meanwhile, has long been credited with an interest in running the National Lottery. The business, which also runs the Sazka brand in the Czech Republic and holds a controlling stake in Greece’s OPAP, was previously expected to float on the London Stock Exchange ahead of challenging in the tender.
However, these plans were ultimately shelved due to market volatility. Sazka has since competed for tenders in Italy’s SuperEnalotto and Turkey’s Milli Piyango. However, in each case it was unsuccessful, with Sisal prevailing in both cases, in partnership with Demirören Holding in the Turkish process.
Sazka would not confirm nor deny that it will participate in the National Lottery tender.
“As one of the Europe’s largest and most successful lottery companies, operating national lotteries in Greece, Italy, Austria and the Czech Republic, Sazka Group is aware of the upcoming license renewal process for the UK National Lottery,” a spokesperson for the business told iGB.
“Once the UK Gambling Commission has announced the terms and conditions for bids we will evaluate them to determine the Sazka Group’s response.”
Other potential bidders include Sir Richard Bransons’s Virgin Group, which media reports suggest has already met with the tender managers.
Overseeing the tender is John Tanner, a manager brought in from Her Majesty’s Revenue and Customs by the GB Gambling Commission to lead the process. He is being supported by Andrew Wilson, as commercial director, with investment bank Rothschild & Co as lead financial advisor.
For the first six months of Camelot’s 2019-20 financial year, the operator reported a 13.5% year-on-year increase in sales to £3.92bn. This was aided by a 40.0% jump in digital sales for the six months to 28 September 2019, which climbed to £1.16bn.