Billionaire media entrepreneur Richard Desmond has launched legal proceedings against the UK Gambling Commission, seeking damages of up to £1.3bn in a dispute over the National Lottery licence competition. The case, which opened at the High Court on Thursday, centres on allegations that the regulator made significant procedural errors during the bidding process for Britain’s largest public sector contract.
Desmond’s Northern & Shell investment company and the New Lottery Company are pursuing the claim, arguing that the Gambling Commission made “manifest errors” during the competition process. Legal representatives for Desmond’s companies contend that the bidding competition was fundamentally flawed and should have been rerun after the contract was modified following its award.
The 10-year National Lottery licence was awarded to Allwyn in 2022, a company owned by Czech billionaire Karel Komárek, which began operating the lottery in 2024. Desmond’s legal team maintains that multiple issues rendered the selection process invalid.
Court documents reveal that Desmond’s lawyers will cite case law suggesting courts should favour claimants when awarding damages if regulatory fault creates uncertainty about alternative outcomes. The legal team will request the court “err on the side of the claimant” when assessing the claim.
Any damages awarded would likely be funded from the National Lottery’s good causes fund, which receives approximately £30m weekly from ticket sales. If the payout exceeds available funds, UK taxpayers would be required to cover the shortfall, raising concerns about the potential impact on charitable funding.
The Gambling Commission has defended its process as thorough and rigorous. In legal submissions, the regulator described Desmond’s bid as “fanciful” and noted it received poor scores during evaluation. The commission will argue that its procedures were robust and properly conducted.
Allwyn has joined the case alongside the Gambling Commission, stating that its reputation could be damaged if the court determines it should not have won the bidding process.
Earlier this year, Desmond rejected a settlement offer from the commission reported to be worth approximately £10m. The Dubai-based businessman has disclosed that he incurred £17.5m in costs related to his unsuccessful lottery licence bid.
The case represents a significant legal challenge to the UK’s regulatory framework for major public contracts and could set precedents for future procurement disputes in the gaming sector.
Source: theguardian.com
