£1.3bn UK National Lottery legal battle gets underway
Richard Desmond is suing the Gambling Commission over its decision to award Allwyn the National Lottery licence.
UK.- A legal challenge against the result of the Gambling Commission’s National Lottery tender got underway in London today (Thursday). Richard Desmond’s companies Northern & Shell and The New Lottery Company (TNLC) are suing the British gambling regulator after losing another bid to run the UK National Lottery in the latest tender, which was won by Allwyn in 2022.
Desmond, who is known for media titles like Daily Express, Readers’ Wives and Asian Babes, says the Gambling Commission committed “manifest errors” and that the National Lottery bidding process was flawed. He wants up to £1.3bn in damages, and his lawyers have urged the court to “err on the side of generosity” towards the Dubai-based billionaire.
Allwyn took over the running of the National Lottery last year, becoming the first operator to replace Camelot since the lottery was created in 1994. Camelot had also initiated legal action but was subsequently bought by Allwyn.
Desmond had also bid for the lottery in previous tenders but lost. Despite his support for Brexit, he will base his case on EU law. His legal team argues that TNLC’s bid was wrongly disqualified and that the Gambling Commission introduced undisclosed requirements and failed to offer feedback that could have improved TNLC’s bid.
They also argue that Allwyn should have been excluded for breaching rules that prohibited media briefings. They cite reports in The Guardian about Allwyn founder Karel Komárek having alleged ties to Russian financial institutions and claim that these potential links were not considered by the regulator.
The lawyers claim that changes to the process after it began were enough to merit restarting the tender, which could have given TNLC another chance. The lawsuit estimates that TNLC and Northern & Shell spent £17.5m on the lottery bid and that the company could have earned £1.3bn had it won.
It has been noted that if the case is successful, any award of damages to Desmond’s companies would be taken from the National Lottery’s funding for good causes, which receives around £30m a week from sales. If these funds are not enough, taxpayers would have to make up the difference.
The regulator stands by the fairness of the National Lottery tender and has deemed the legal challenge as “fanciful”, stressing that Desmond’s bid performed “extremely badly” during its evaluation, making the legal case a potentially embarrassing risk for the mogul. His legal team has already withdrawn part of its claim involving an appeal against the scoring used in the tender, leaving TNLC having to cover some of the Gambling Commission and Allwyn’s legal costs.
Sarah Hannaford KC, appearing for the regulator today, argued that it was “extremely unusual, if not unique, for a bidder who lost so spectacularly to argue that it should have won”. She said it was “wishful thinking” for TNLC to claim it could have won if it had received better feedback.
Allwyn is supporting the Gambling Commission in the case noting the potential to harm its own reputation.
