CAT issues third judgment under Subsidy Control Act
The UK Competition Appeal Tribunal (CAT) has issued a judgment – which can be found here – which relates to an alleged grant of a subsidy by the Gambling Commission to Camelot UK Lotteries Limited. The ruling involved how the Commercial Market Operator (CMO) principle works.
On 26 February 2026, the CAT issued judgment on an appeal that was brought under section 70 of the Act, by the New Lottery Company and others (the Appellants).
This was the third judgment under the Subsidy Control Act 2022 (the “Act”), and it relates to the grant of an alleged subsidy by the Gambling Commission to Camelot UK Lotteries Limited.
Background
On 19 July 2023 a proposal was approved by the Gambling Commission to grant £70 million to Camelot for marketing and promotional purposes.
The Appellants claimed that this was in fact a subsidy, under section 2(1) of the Act; therefore, the Gambling Commission should have awarded the funding in line with the provisions of the Act.
The judgment focused on two key areas, which give some useful insights to public bodies seeking to award funding in the future. The issues were:
- Was it a subsidy?
- If so, should relief be refused on the grounds of the Appellants’ delay?
Was it a subsidy?
This question hinged on the CMO principle. The set of facts before the CAT were highly unique, given the relationship between the Gambling Commission and Camelot; however, the CAT was clear that the CMO principle was still capable of being applied, despite there being no real market comparator.
Whilst the Appellants argued that the decision conferred long-term financial benefits on Camelot, and a rational private investor would have required further refinement of the econometric modelling, the CAT found that the arrangement was indeed, commercial in nature and that “fell comfortably within the wide margin of judgment available to the [Gambling Commission], and there is no basis for a conclusion that a rational private investor would not have entered into the arrangement because of the potential for Camelot/Allwyn to receive further benefits additional to those which the Respondent focused on at the time.” Ultimately, the CAT found that the decision did not confer an economic advantage on Camelot, due to the CMO.
In coming to such a decision, it considered the fact that the decision aimed to financially benefit the National Lottery, both parties carried out detailed financial modelling and there was evidence to show projections about return on investment.
Whilst it did go on to consider the other elements of the definition of a subsidy, these were irrelevant to the outcome of the judgment.
Should relief be refused on the grounds of the Appellant’s delay?
The CAT considered the question of delay, despite it finding that the decision was not in fact a subsidy.
The Appellants stated that they found out about the Gambling Commission’s decision on 15 January 2025. However, they contacted the Gambling Commission over two months later, on 19 March 2025 and issued proceedings on 8 May 2025.
The Act requires challenges to be brought within one month of (i) publication of the subsidy on the Government’s subsidy database or (ii) where the duty to make an entry on the subsidy database does not apply (for example, because the public body does not believe the arrangement to be a subsidy in the first place), the date the applicant knew or ought to have known about the decision being challenged. There was no publication in this instance, due to the fact that the Gambling Commission concluded its decision was not a subsidy. The CAT therefore decided that the challenge should have been brought within one month of the Appellants’ knowledge of the decision on or before 15 February 2025 and the Applicants had not acted sufficiently promptly by issuing proceedings on 8 May 2025. As such, the Tribunal stated that if the Applicants had in fact been entitled to relief the tribunal would have nonetheless been inclined to refuse it.
Conclusion
This judgment builds on the first three CAT judgments under the Act, and gives us some useful insight into how it will interpret elements of the Act, including application of the CMO, and its attitude towards timescales in bringing a challenge.
A further three cases are currently before the CAT, and therefore the case law and judicial guidance in relation to the Act continues to develop.
If you require legal advice on the CMO principle or any issues regarding the Subsidy Control Act 2022, our Commercial team can assist.
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