The next operator of the National Lottery is in talks to buy the incumbent, Camelot, in a £100m [$115m] deal that would pave the way for the removal of the latter’s final legal challenge against the industry regulator.

Sky News has learnt that Allwyn Entertainment is in advanced discussions with Camelot’s Canadian owner about a takeover of its UK operations.

The surprise deal would result in Allwyn controlling the company it will replace as the National Lottery operator in February 2024.

Sources said an agreement could be struck in the coming weeks and was likely to see Allwyn paying in the region of £100m to acquire Camelot’s UK arm.