Richard Desmond loses £1.3bn lawsuit over National Lottery contract

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Media tycoon Richard Desmond has lost a lawsuit against the UK gambling regulator over claims it ran an unfair licensing process for the National Lottery.

Desmond’s Northern & Shell had sought as much as £1.3bn in damages from the Gambling Commission, arguing that the process was rigged in favour of Allwyn, which won the 10-year contract to run the state-franchised competition.

But a judge at the High Court in London on Friday dismissed the case entirely, finding that the regulator ran a fair competition and that Northern & Shell’s own bid was “deficient”.

In a critical 280-page judgment, Mrs Justice Joanna Smith said: “I consider that the Commission conducted a rigorous, methodical and fair process which resulted in rational conclusions which it was entitled to reach.”

Northern & Shell said it would appeal. A spokesperson said: “They won. We lost. We appeal. It’s not over”.

Northern & Shell launched the lawsuit after it lost out in the contract in 2022 to Allwyn, whose ultimate beneficial owner is Czech billionaire Karel Komárek.

At a trial last year, Northern & Shell argued the regulator made “manifest errors” in how it decided who should secure the contract.

It challenged the role of the commission’s financial adviser NM Rothschild, contending there was an “appearance of bias” as Rothschild had provided investment banking services to Allwyn.

Northern & Shell initially alleged an actual conflict of interest but dropped that part of the case.

However, the judge said on Friday that “there was not even a perceived or apparent conflict of interest”. She noted that Rothschild’s work for Allwyn ended well before the lottery contract competition.

The judge was also critical of Northern & Shell’s approach to the case, describing it as a “moveable feast” and “inexcusable”. Some points “were not dropped until it was specifically drawn to the claimants’ attention . . . that there no longer seemed to be any viable basis on which they could be maintained”, the judge said.

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.”

Allwyn said it also welcomed the “clear and comprehensive” judgment. It said 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.”

Additional reporting by Stephanie Stacey in London