Businessman Richard Desmond has withdrawn part of his £1.3 billion legal challenge against the Gambling Commission over the awarding of the fourth National Lottery licence, just months before the case heads to trial in October.
Desmond’s companies, Northern & Shell and The New Lottery Company, are suing the Commission over claims that the bidding process for the lucrative ten-year contract was unfair. The contract was awarded to Allwyn, the lottery operator owned by Czech billionaire Karel Komarek, which took over from Camelot, the previous licence-holder. Allwyn is named as an interested party in the proceedings.
Earlier this month, Desmond indicated that he would no longer pursue some of the allegations regarding how the Commission scored applications for the licence. The partial withdrawal does not affect the overall direction of the case, which is still set for a full trial in October. If Desmond’s claim succeeds, it is likely that UK taxpayers will foot the bill, either via Treasury funds or through money normally earmarked by the National Lottery for good causes.
The Gambling Commission reportedly offered a £10 million settlement last year, which was rejected by Desmond, prompting the continuation of the case.
Desmond, the former owner of the Daily Express, Channel 5, and a string of adult magazine titles, claims the bidding process lacked fairness and transparency. The lawsuit has become one of the most high-profile procurement challenges in recent years.
In June, Desmond won a procedural victory when the High Court refused a request for him to post £15 million in security for costs. Lawyers acting for Allwyn have warned that if Desmond loses, he could face legal costs of at least £55 million.
Questions have also been raised about Desmond’s capacity to finance the lengthy litigation. While The New Lottery Company reported a pre-tax loss of £127,000 in 2023, Northern & Shell reported £20.8 million in cash reserves. Desmond’s legal team has maintained that the company is well-resourced and committed to pursuing the claim.
“It would be fanciful to suggest that a company of Northern & Shell’s stature would seek to tarnish its commercial reputation to avoid any adverse cost,” said Sa’ad Hossain KC, representing the group. “Any such cost would be an insignificant proportion of its assets.”
With the trial scheduled for the autumn and pressure mounting over the potential public cost of the claim, Desmond’s partial withdrawal may narrow the legal battlefield, but it leaves the core of the dispute—and the £1.3 billion damages claim—very much alive.
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Richard Desmond drops part of his claim in National Lottery dispute as £1.3bn trial approaches