The Czech lottery operator Allwyn may reportedly face enforcement action from the UK Gambling Commission (UKGC) due to its failure to achieve one of its contractual targets. The company noted in its annual report that the UKGC is reviewing the case and if it should take any regulatory action.
Objective related to technological upgrade
The issue stems from the company’s failure to achieve a key milestone in its agreement to manage the National Lottery. While the operator confirmed the issue, it did not specify what contractual milestone it had failed to reach. The company noted that it was an objective related to its promised technological upgrade “which has long constrained new product development and innovation.” The operator has explained that the upgrade is being delayed because it has “significant scale and complexity”. This may result in the potential enforcement action against the operator by the UKGC.
In a statement, Allwyn said, “While Allwyn UK continues to progress as expeditiously as possible while prioritising contributions to Good Causes, after the end of the reporting period a contractual milestone in the enabling agreement was not reached. The Gambling Commission is reviewing what, if any, enforcement action might be taken against Allwyn UK in relation to that milestone.”
Transitioning from Camelot’s infrastructure to a modernised system is proving expensive for the operator. Allwyn acknowledged that the costs are mounting and that some of these expenses may never be recovered. The operator also explained that it lacks full direct control due to its reliance on third-party suppliers to deliver critical tech solutions.
Allwyn’s term so far
A few years ago, by the UKGC, replacing Camelot and ending its long reign. The licensing process was embroiled in controversy due to Allwyn’s alleged past ties with Russia. Other significant challenge that the company faced, which remains till date, is the upgrade of the National Lottery’s aged tech infrastructure.
Additionally, Camelot and other competitors critiqued the UKGC’s decision to crown Allwyn as the next National Lottery Operator. Northern & Shell initiated legal proceedings against the regulator after the gambling commission crowned Allwyn as the next National Lottery Operator. The publishing group, which was among the bidders, filed the claim implying that the procurement process in 2022 was controversial.
Meanwhile, the operator registered adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 1.55 billion ($1.76 billion), up 4 percent year-on-year. Allwyn’s chief executive officer, Robert Chvatal, said that this growth was achieved despite the ongoing financial challenges in the UK. He added, “We continue to invest in key parts of our technology stack and seek to further leverage our enhanced technology and content capabilities across markets to deliver the best and safest user experience to players.”
