OUTGOING UK National Lottery operator Camelot has dropped its appeal against a legal ruling that would have prevented the handover of the contract to rival Allwyn.
Allwyn said late on Monday that Camelot had withdrawn its legal challenge to an earlier court ruling which would have seen it go to the Court of Appeal next week.
Allwyn said this "removes an important obstacle to the UK Gambling Commission signing the enabling agreement with Allwyn that will allow the transition process to begin", ahead of the new licence period starting in February 2024.
In return, Allwyn has dropped its counter-claim against Camelot for damages due to delaying the transfer of the £6.4 billion contract.
It is understood the agreement to allow the handover will now be signed within days.
The latest twist in the saga comes amid growing fears that the delay to the handover could have seen the lottery suspended for the first time in its history, with concern over the impact on good causes.
It was thought that good causes could lose out to the tune of more than £1 billion if the licence handover was prevented.
The new lottery operator said it "very much welcomes this decision and looks forward to co-operating with Camelot and the Gambling Commission on the transition process".
"Allwyn is excited at the prospect of becoming the custodian of Europe's biggest lottery."
But Camelot is still pressing ahead with its main legal claim challenging the decision to award the lottery licence to Allwyn, with a trial set to go ahead in January or February and Camelot expected to sue the regulator for an estimated £500 million damages.
A spokesman for Camelot said: "By pursuing the opportunity to be awarded the fourth licence, Camelot has sought to limit the risk that good causes or the exchequer would have to meet damages if the licence award was found by a court to have been unlawful.
"However, it has become clear that the potential damages covered by the undertakings needed for the appeal to proceed would have been too large, and involved too great a commercial risk, for it to be reasonable to provide them."
It added the group "will now co-operate with Allwyn and the Gambling Commission to facilitate an orderly transition to the fourth licence", but is preparing for the main legal trial early next year.
The Gambling Commission announced in March that it had chosen Allwyn, which runs lotteries in Austria, Italy and Greece, for the next licence, ditching Camelot after 30 years.
Camelot launched legal proceedings a month later challenging the decision, claiming the commission got the decision "badly wrong".
The commission asked the High Court to overturn the automatic stay-put order on the handover due to the legal case, warning of the disruption it could cause to the lottery.
In late June, the court agreed to lift the suspension preventing it from beginning the licence transfer, but this was then appealed against by Camelot, legal action which has now been dropped.