Allwyn is the new UK National Lottery Operator. The stakes are higher than ever. Marese O’Hagan talks to Robert Chvatal about the opportunity that the company, formerly called Sazka Group is set to seize.
It was expected that there would be some fallout when Allwyn won the UK National Lottery license in March 2022. Camelot held the UK National Lottery license unrivaled for 28 years.
The aftermath, however, was far more severe than initially thought. Camelot filed a High Court case against the decision a few days after it was announced. Nigel Railton, the chief executive of Camelot, said that the GB Gambling Commission made ‘badly incorrect decisions.
Even though the lawsuit was dropped in September last year, the feeling of doubt lingered. Robert Chvatal, Allwyn’s chief executive officer says that despite the delays in the licensing process, the company is ready to accept the license. Chvatal, Allwyn’s interim CEO and the company that acquired Camelot UK operations have eased some of the challenges.
Chvatal says, “We felt both proud and humbled when we heard in March last year that we won the competition.” I strongly believe we brought the best of Europe into our bid and highlighted opportunities to make UK National Lottery safer, bigger and better.
What will Allwyn do during his tenure? Chvatal says that digitalisation, with an equal distribution between the retail lottery and online lottery and a change in portfolio are key to Allwyn’s tenure.
He explains: “Going ahead, it will be a journey that involves portfolio innovation and further digitalisation, not just in online retail but in all areas of the business.” Retail is important to us, and we are committed to helping brick-and-mortar businesses move into the digital age.
Leading the Transition
Allwyn’s application for the National Lottery’s fourth licence included a player protection component. This will be a priority in Allwyn’s future plans. Chvatal says that this will be directly fed into the National Lottery’s Good Causes Scheme.
He continues, “It is also about robust player protection. That’s exactly what lottery should or has been.” We don’t wish to be depended on just a handful of high rollers.
We want to have as many customers as possible who play regularly, or only occasionally, to ensure that we can give the best possible return to the UK’s good causes.
Allwyn does not want to reinvent the wheel. Chvatal’s plan focuses on improving existing practices.
He explains, “Our top priority is to ensure a smooth transition between our third and fourth licenses on the first day.”
The focus will then shift from product innovation to portfolio innovations. What we will do in the bid to transition into the future is build on what’s already been done and develop it.
Operation Transformation
Chvatal, while confident about laying the foundation for Allwyn’s new tenure doesn’t consider its presence in Europe a given.
He says, “We believe having an exclusive license is something you shouldn’t take for granted or get complacent over.” No monopoly, no exclusive position anywhere in the world can guarantee success with customers.
Chvatal believes that humility is the key to success, even if Allwyn receives a monopoly like OPAP did in Greece.
We work as if there was no monopoly because the gaming market is so large that consumers can choose freely.
Chvatal returns to his native UK where he acknowledges that National Lottery is a great way of improving the quality of life.
He continues: “What is particularly advantageous in the UK is the fact that the UK has a finite and concrete group of beneficiaries, including culture, sport, heritage, social, etc.” I think that this will make the connection between the benefits of the lottery for consumers as well as for society much clearer and more tangible.
Land of the Free
Allwyn’s US plan has yet to be successful, despite its success in other countries such as Greece and Cyprus (OPAP), Austria and Italy (LottoItalia), and the Czech Republic.
In August of last year, it revealed its intentions to list at the New York Stock Exchange through a partnership with Cohn-Robbins Holdings Corporation. The deal fell through the next month. However, that doesn’t mean plans to bring its expertise to America are over.
Chvatal says that the US market has been a very interesting one for Allwyn. “Firstly, even though US lottery revenues are high, the US is not always first to adopt online and ilotteries.
We wanted to go to the US to advocate for more liberalisation in the lottery industry.
When, not “if”
Chvatal claims that the market’s conditions were a major factor in its decision to abandon plans for an IPO.
He explains that “for Allwyn, listing was always the next logical step.” We decided to not list because the financial markets and capital market were volatile.
The idea behind listing [Allwyn] was to reaffirm that it is the lotto operator of choice, vis-à-vis regulators and government agencies with whom we have also been publicly listed.
The question Allwyn faces when listing is “when, not if.”
Allwyn acquired Camelot Lottery Solutions in the US earlier this month, after a January deal was completed. What does it mean that Allwyn is now present in the US after taking over the business which runs the Illinois State Lottery?
Chvatal says that “Camelot US” was an opportunity which arose simultaneously with the acquisition of Camelot UK. It was almost a “double deal” because we were able to enter the US market immediately, but there was a risk of having to extend our license in Illinois.
Face forward
Chvatal, despite the difficulties Allwyn faced in the past, is optimistic about her future.
He explains, “At this time we’re at a stage in which we want to solidify our position on individual markets.” This is certainly the case for the UK where we must focus on transition.
The new Illinois Lottery will be developed and we’ll take over Illinois. So, there may be a delay when it comes time to put the flags of the UK on the map. We believe that our top priority is to manage the transition and enter the US.
Allwyn wants to be the number one operator, says Allwyn. He says that Allwyn aspires to be number one.
Allwyn will have plenty of opportunity to establish itself at the top, with a tenure of ten years beginning in 2024.
