Charities threatened by botched National Lottery upgrade

Fundraising forecasts in doubt as Allwyn struggles to deliver critical technology upgrade

Charities are facing a significant risk to funding as the National Lottery struggles to deliver a critical technology upgrade under its Czech billionaire owner.
Allwyn, controlled by the gas tycoon Karel Komarek, won the National Lottery licence two years ago with a promise to double its contribution to good causes. The pledge depended on an overhaul of the software and hardware underpinnings.
However, sources close to the National Lottery said it was proving so problematic that the changeover was likely to be pushed into next year.
Allwyn executives are said to be working towards a new deadline of February next year, having missed several target dates already.
The operator could be forced to halt the upgrade until the summer of 2025, or even later in the year, according to sources. They said technology experts have likened the upgrade attempts to “trying to stick a Microsoft system on top of an Apple computer”.
It is understood that a crunch board meeting is scheduled to take place this week to decide whether to switch over to the new system in the next few months.
It is feared long delays will leave Allwyn unable to meet its highly ambitious fundraising forecasts, which were based on the growth in National Lottery participation it said new technology would unlock.
The operator pledged to increase its charitable donations from £17.9bn to £38bn over the course of the licence.
Contributions to good causes are expected to be several hundred million pounds short of projections in each of the first two years under Allwyn. The company aims to make this up over the 10 years of its National Lottery licence.
The National Lottery is both one of Britain’s most lucrative public sector contracts and the country’s largest distributor of charity funds, providing vital funding for sports, heritage and good causes across the UK.
The complex IT transfer should have taken place in time for Allwyn to take over the running of the lottery from Camelot in February of this year. It was delayed after the existing provider, International Games Technology (IGT), challenged the move in the High Court.
Camelot had run the National Lottery since its launch in 1994, with IGT supplying the software and hardware that underpins shop lottery terminals since the lottery’s inception.
The dispute with IGT prompted Robert Chvátal, Allwyn group chief executive, to admit that the upgrade would be “deferred” by at least six months. Yet 10 months after it assumed control of the lottery, there is little sign that the new provider, Scientific Games, is about to step in.
Sources involved in the project claimed the changeover was so far behind schedule that Allwyn’s ability to meet the latest deadline was also in serious doubt too.
Launching the system before it is fully ready would leave it prone to disastrous glitches. Such an outcome would further undermine the company’s plans to introduce a raft of new games that it insists will boost sales.
Andria Vidler, the boss of Allwyn’s UK arm, has said she is “filled with optimism about how the company’s innovation will boost funding for National Lottery good causes”.
Meanwhile, the Gambling Commission has claimed: “The fourth licence will lead to an increase in returns whilst keeping the National Lottery safe to play.”
In the run-up to taking over the licence, Allwyn reportedly warned the National Lottery’s 12 associated charitable bodies, which distribute money to good causes, to expect the previous year’s funding of around £1.8bn to barely increase during its first year in charge.
Sales have subsequently slowed under Allwyn, meaning it is further behind on its projections than anticipated. The company maintains it will still succeed in doubling the amount of funding it provides to charitable causes from £30m a week to £60m.
One former Camelot recently told The Telegraph: “We could not see any possible way you could ever raise that sort of money whatsoever.”
An Allwyn spokesman said: “We are investing more than £350m in the biggest technology upgrade the National Lottery has ever had, and we are working towards switching over from the existing legacy systems – holding 30 years of data – to our new modern platform.
“Once it is live, we will be able to transform the way customers play the National Lottery and crucially, drive even more returns to good causes.”