Competition Appeal Tribunal rejects New Lottery Subsidy Control challenge
27th February, 2026
The Competition Appeal Tribunal has decided the Subsidy Control case of The New Lottery Company v Gambling Commission in favour of the public authority, finding that the Gambling Commission's decision in July 2023 to contribute £70.21m towards Camelot’s marketing activity in respect of the National Lottery was consistent with normal market conditions.
As such it fell under the ‘Commercial Market Operator principle‘ and did not constitute a subsidy under Section 2(1) of the Subsidy Control Act 2022. In this article, Alexander Rose looks into what the case means for public authorities administering public funding and those considering bringing Subsidy Control challenges.
Why did the New Lottery Company bring a Subsidy Control claim?
The Subsidy Control claim was brought by the New Lottery Company (which was established by fellow applicant, Northern & Shell PLC, for the purposes of competing for the fourth national lottery licence). Although Camelot was not itself successful in bidding for the fourth national lottery licence, Camelot was acquired by the successful bidder Allwyn in February 2023. The New Lottery Company has challenged the process by which the licence was awarded and is seeking damages reported to be in excess of £1.3bn in a separate case.
In this case, the appellants argued that the decision of the Gambling Commission to assign £70.21m to Camelot to market the National Lottery conferred an economic advantage, “on the grounds that the subsidy provided Camelot with resources to market and promote the National Lottery, thereby improving the National Lottery’s competitive position in the relevant markets, to the ultimate benefit of Camelot and Allwyn, as both Camelot’s owner, forming a single enterprise with Camelot for the purposes of the Act, and the operator of the Fourth Licence”.
Competition Appeal Tribunal decision
The Competition Appeal Tribunal rejected the argument that no rational private investor would have entered into the transaction, instead concluding that the transaction “fell comfortably within the wide margin of judgment available” to the public authority in determining how a commercial market operator might behave in such circumstances.
The fact that the form of the financial support could be argued to be revenue foregone was considered, with the Competition Appeal Tribunal referring to EU State aid case law, in reaching the view that this could still amount to an economic advantage given by way of public resources.
Although the Competition Appeal Tribunal reached a conclusion that no subsidy arose, an opinion was provided on the timing of the action, with the Tribunal reaching the view that proceedings were not brought “sufficiently promptly“. Under rule 98A of the Competition Appeal Tribunal Rules, an appeal in a subsidy control case must be brought within one month of the “transparency date” (when relevant information is posted on the National Transparency Database) or within one month of information having been provided in response of a Section 76 Pre-Action Information Request having been submitted. However where a public authority takes the view that the measure is not a subsidy, it follows that transparency information is never uploaded. In such circumstances, the backstop transparency date is set out in Competition Appeal Tribunal rule 98A(4)(b)(i) which states that the relevant date is that which the interested party knew or ought to have known of the making of the decision.
Conclusion
The case of The New Lottery Company v Gambling Commission is important because it provides guidance to potential challengers as to the standard which must be met in order to argue that a measure falls outside the range of actions which a commercial market operator would undertake, but also the need to bring an action promptly once information on a potential subsidy becomes available.
All three Subsidy Control cases have now been found in favour of the Public Authority. However, another three cases are to be decided. This includes the case of Bristol Airport v Welsh Ministers which was recently heard by the Competition Appeal Tribunal and involves an assessment as to whether the application of the Subsidy Control principles aligned with the requirements of the Subsidy Control Act 2022. Therefore the case law is developing quickly and practitioners need to adapt their understanding of the requirements of the Subsidy Control regime in line with the latest decisions.
Ward Hadaway has expert Subsidy Control advisers that can support you with public funded projects. Please do get in touch if we can be of assistance.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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