International Game Technology v The Gambling Commission
Citation: [2023] EWHC 1961
Background
International Game Technology v The Gambling Commission [2023] EWHC 1961 was concerned with a procurement challenge arising from the competition for the Fourth Licence to run the National Lottery. The case dealt with the standing of the International Game Technology group (“IGT”) to bring a challenge.
Four companies applied for the Fourth Licence: Camelot UK Lotteries Ltd, The New Lottery Company, Allwyn, and Sisal. Allwyn was the winning applicant, and Camelot was the second-placed bidder. IGT was a group that included companies involved with Camelot as sub-contractors or planned sub-contractors but did not itself apply for the Fourth Licence. After Allwyn’s parent company purchased Camelot, Camelot discontinued its claim against the Commission.
The issue to be decided was whether the IGT Claimants had standing to bring a claim under the Concession Contract Regulations 2016 (CCR16) and whether they were economic operators to whom a duty was owed. The Commission and Allwyn argued that the IGT Claimants lacked standing as they were, at best, sub-contractors to Camelot and not bidders for the Licence. The IGT Claimants argued that a duty was owed to each of them because they were “economic operators”; that the position in EU law is immaterial; and that what mattered was the simple interpretation of the definition of “economic operator” now used in the CCR16.
An additional issue arose concerning the third claimant, a U.S. company, and whether the procurement was covered by the Government Procurement Agreement (GPA) with the USA.
Held – Coulson LJ (sitting as a High Court judge)
- The EU Law Position: The Remedies Directive did not impose an obligation on the UK to provide standing to a wider group than unsuccessful bidders. On the wording of Article 1(3), an entity that did not seek to obtain the contract (i.e. a bidder) would generally not have the necessary standing to challenge the result of the procurement. The Court held that this reading was borne out by the travaux préparatoire, the CJEU case law, and the Irish case law.
- The Domestic Law Position: The UK did not intend to expand the pool of those who had standing to bring a procurement challenge under CCR16. There was nothing in CCR16 or any of the other explanatory material which gave any such indication; rather they pointed unequivocally in the other direction. The Court held that CCR16 must be read in a purposive way in order to ensure that its interpretation matches EU law. Therefore, on the approach adopted by the Commission and Allwyn, the IGT Claimants did not have the right to challenge the award.
- The Definition of ‘Economic Operator’: Regardless of the answers to Issues 1 and 2, the Court rejected the wide interpretation of “economic operators” favoured by IGT, limiting standing to unsuccessful bidders in the competition. To hold otherwise would be incompatible with other parts of the CCR16, and there were no binding authorities suggesting a different conclusion.
- The Standing of C1-C6: None of the specified entities (C1, C3, C4, C5, and C6) had the necessary standing to bring the claims.
- The GPA Issue: Under Annex 5 of the EU’s GPA agreement, which lists the services covered by the GPA, neither ‘lottery services’ nor ‘services concession contracts’ appeared. Consequently, the GPA was not applicable to this procurement, meaning that C3, as a U.S. company, was not owed a duty by the Commission under Regulation 51. Therefore C3 had no claim on this basis.
Sarah Hannaford KC acted for the Defendant. A copy of the judgment is available here.
For the decision in the consequentials hearing, please refer to the September 2023 case law update.
