Allwyn UK Faces Potential Trouble for Failing to Achieve Targets

The Czech lottery giant Allwyn could face regulatory trouble in the UK due to its failure to achieve one of its contractual targets. In its annual report, the lottery company confirmed that the UK Gambling Commission is reviewing the case and whether it should take regulatory action.

The Operator Failed to Achieve One of the Promised Targets

A few years ago, Allwyn replaced Camelot as the UK National Lottery operator, marking the end of the latter company’s long reign.

In addition to that, Camelot and other competitors initially critiqued the UKGC’s decision to crown Allwyn as the next National Lottery operator, launching legal proceedings against the regulator. Eventually, Allwyn and Camelot buried the hatchet, which culminated with a transaction in which Allwyn purchased its competitor.

However, Allwyn’s National Lottery contract with the UKGC outlined several milestones that the Czech lottery company was supposed to achieve. As it turns out, Allwyn has failed to achieve one of these milestones.

Allwyn Expects Further Costs in the UK

In its annual report, Allwyn confirmed the issue but did not specify which contractual milestone exactly it had failed to reach. The Czech company, however, confirmed that it was an objective related to its promised update of The National Lottery’s aged tech infrastructure “which has long constrained new product development and innovation.”

Allwyn explained that this planned upgrade has “significant scale and complexity,” causing significant delays. Because of that, the UKGC might potentially decide to take enforcement action against the operator.

While Allwyn UK continues to progress as expeditiously as possible while prioritizing 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.

Allwyn statement

Allwyn added that it expects to continue to incur significant costs in the transition process, noting that some of these costs might not be recoverable. It further explained that it lacks full control of the transition since it’s relying on third-party suppliers.

CEO Chvatal Praised the Results Despite the UK Hurdles

In the meantime, Allwyn’s chief executive officer, Robert Chvatal, said that he was very pleased with the company’s performance in 2024. He explained that the company’s total revenue increased 12% year-on-year, reflecting strong organic growth in GGR.

The company’s adjusted EBITDA, meanwhile, increased 4% year-on-year, to EUR 1.55 billion ($1.76 billion). Chvatal said that this growth was achieved despite the ongoing financial challenges in the United Kingdom.

Chvatal 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.”