Good causes could lose £1bn as Camelot sues over ‘unlawful’ national lottery licence

UK Lotto operator challenges the Gambling Commission's decision to award 6.4bn contract to its rival, Allwyn

More than 1bn for good causes could be lost over a legal action alleging the new licence to run the national lottery was awarded unlawfully, according to court filings seen by the Observer.

Camelot, which operated the national lottery for nearly three decades, is seeking to reverse the decision to hand the licence to its rival Allwyn. It will go to court later this month in an appeal to delay the handover of the 6.4bn contract. The case threatens to embroil the lottery in its biggest controversy since it was launched in 1994 - and there is even a risk the lottery will be suspended for the first time in its history.