Judge Dismisses Richard Desmond’s Lawsuit Over UK National Lottery

A High Court judge has dismissed media mogul Richard Desmond’s claim against British regulator the Gambling Commission for £1.3 billion in damages regarding the granting of the National Lottery license to Allwyn; a ruling which Desmond is planning to appeal.

Lawyers representing Desmond’s Northern & Shell company and The New Lottery Company (TNLC) alleged “manifest errors” in the bidding process when Allwyn was granted the license in 2022. Allwyn took over from Camelot, which had operated the National Lottery since its inception in 1994.

Desmond had attempted to gain the license himself, and claimed he had incurred £17.5 million in needless costs while making his unsuccessful bid.

Desmond, who is a former owner of UK broadcaster Channel 5, had asked the court to “err on the side of generosity” when assessing his claim. Desmond passed on a previous opportunity to settle the case for £10 million.

Case dismissed

Mrs Justice Smith dismissed the claim, stating in her ruling:

“The claimants have failed to make out any case of manifest error on the part of the commission in their process claim. They have also failed to establish that either [previous licence holder] Camelot or Allwyn should have been disqualified from the competition, whether by reason of incumbency advantage (Camelot) or conflict of interest (Allwyn).

“The competition that was conducted for the award of the fourth license reached a lawful outcome.”

The judge also mentioned the “unfocused” way that Desmond’s claim was conducted, with parts of his argument being dropped at short notice.

She wrote:

“The extent of this movable feast was regrettable and (given the legal resources available to the claimants) inexcusable. It led to significant time being wasted by the other parties in dealing with issues which were subsequently abandoned. It also risked leaving the court with an imperfect understanding of how the case was being advanced. To describe this as surprising, given the nature and alleged value of this claim, would be an understatement.”

Appeal set to be made

Desmond is planning to appeal against the verdict. A spokesperson for Northern & Shell is reported to have said: “They won. We lost. We appeal. It’s not over.”

Reacting to the judgment, the Gambling Commission said:

“This is an important judgment for the future of The National Lottery that we welcome. This judgment makes clear that the Gambling Commission ran a fair and robust competition to award the fourth National Lottery license, and that none of the contested changes to the license, in the course of its implementation, were substantial or contrary to the relevant procurement regulations.

“The judgment gives resounding support to good causes by enabling Allwyn, with oversight from the Commission, to continue with their plans of investment in the National Lottery without further distraction. Our priority remains to continue regulating the National Lottery for the benefit of participants and good causes.”

Allwyn is quoted as saying the ruling “draws a line under a long-running series of allegations about the integrity of the competition process, many of which were withdrawn during the proceedings, with the remainder rejected by the court”.

Previous dismissal

This is not the first ruling to have been made against the TNLC. The Competition Appeal Tribunal (CAT) dismissed a separate challenge in February, where the TNLC had alleged the Gambling Commission’s arrangements around the awarding of the license amounted to an unlawful subsidy.