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Czech lottery giant Allwyn has agreed to buy current UK National Lottery operator Camelot in a deal that is set to end the bitter legal battle between the two.

High Court action had threatened to delay the handover of the lottery licence to Allwyn after it won the licence to run the UK lottery system in a fractious tender process.

But the buyout of the existing operator for a reported £100m will effectively kill off any obstacles preventing the takeover.

"Common ownership of the operators of both the third and fourth [lottery] licences will help ensure the successful delivery of the National Lottery both in 2023 and over the next decade," said Allwyn chief executive Robert Chvatal.

He added that Allwyn and Camelot shared a common goal to “improve the UK National Lottery and the good causes it celebrates”. He said Allwyn was committed to making the UK lottery better and “raising more for good causes”.

Nick Jansa, executive managing director for Europe, Middle East and Africa at Camelot's former owner the Ontario Teachers' Pension Plan, said the deal "best positions the National Lottery for a smooth transition to the fourth licence operator".

Camelot had challenged both the decision to give Allwyn the fourth lottery licence and the Gambling Commission's procurement process. The move had at one point led to the suspension of the transition process, putting at risk Allwyn’s takeover of the lottery in February 2024. In September, Camelot withdrew its legal challenge to suspend the transition, but said it was continuing with its main claim.

The Gambling Commission and charities had warned the action could have “severe consequences for the National Lottery and good causes” it supports.

Camelot wrote to the Gambling Commission in March after it had been narrowly defeated by Allwyn Entertainment, which is controlled by Karel Komarek, 53, a Czech billionaire. Camelot, which was named “reserve applicant”, is understood to have asked the gambling regulator to justify its decision after it emerged that it had scored more highly than Allwyn on almost every measure.

In the run-up to the announcement of the lottery decision, both Allwyn and Camelot had appointed lawyers in preparation of legal challenges to the result.

Camelot argued the way a “risk factor” was applied to the contestants’ bids was wrong and benefitted Allwyn’s ambitious bid. This was based around Allwyn’s pledge for far higher returns to good causes — around £38bn over the ten-year licence — despite plans to halve the price of a ticket for the National Lottery’s main draw.

In its submission to the court, Camelot, which has run the lottery since its inception in 1994, warned: “The award of the fourth licence to Allwyn would effectively put [Camelot] out of business. The loss of the UK contract will significantly diminish the Camelot Group's ability to bid for and operate international lottery contracts in the coming years.”

The deal, which is subject to review by the Gambling Commission, is expected to close in the first quarter of next year.

Camelot's current lottery licence will continue to be operated separately from Allwyn, although most of Camelot’s 900 staff were already due to transfer to their rival when the licence changes in 2024.

In September, Allwyn called off plans to float in New York. Camelot also undertakes lottery activities in the US and Ireland.