UK National Lottery tender appeal dismissed

The Court of Appeal has ended the long legal saga around the Gambling Commission’s tender for the National Lottery licence.

UK.- The long-running legal saga surrounding the tender for the fourth UK National Lottery licence has reached its conclusion. Richard Desmond’s The New Lottery Corporation (TNLC) and Northern & Shell have finally exhausted the legal process, with the Court of Appeal dismissing its final attempt to shake some compensation out of the Gambling Commission.

The British gambling regulator awarded the 10-year National Lottery licence to Czech lottery giant Allwyn in March 2022, but Desmond, who had lost previous bids to run the lottery, complained of supposed irregularities in the process. While Allwyn ultimately bought incumbent Camelot and began operating the lottery directly in February 2024, Desmond sought £1.3bn in damages and challenged a £70m marketing subsidy.

TNLC passed the initial stage in the Gambling Commission’s tender, which assessed applicants’ financial capacity. However, it was excluded from the final selection of candidates “due to failures in mandatory pass/fail criteria”. The applicants were whittled down to Allwyn and Camelot, which had run the lottery since its inception in 1994. 

“A fair and robust competition”

In April, the High Court rejected TNLC’s claim for compensation, ruling that the Gambling Commission’s process had “no mitigating errors” and that TNLC had simply failed to meet mandatory criteria. TNLC appealed, but Lord Justice Peter Coulson of the Court of Appeal has upheld the High Court’s decision. 

The judge stressed that TNLC could not introduce fresh arguments that had already been dismissed at earlier stages. He also noted that the company had suffered “no losses in practical terms.”

The Gambling Commission has welcomed the ruling. “This is an important decision for the operation of The National Lottery and one that we welcome. The Gambling Commission ran a fair and robust competition to award the Fourth National Lottery Licence, and none of the contested changes to the Licence, in the course of its implementation, were substantial or contrary to the relevant procurement regulations.

“The decision gives resounding support to Good Causes by enabling Allwyn, with oversight from the Commission, to continue with their plans for 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’s stewardship of the lottery has not been without controversy. Last year, the Times reported that the Gambling Commission was considering possible enforcement measures regarding the fulfilment of commitments made during the bid.

However, the company has since made progress with its pledge to modernisation operations, rolling out upgrades to retail infrastructure and launching a new two-round National Lottery format as it aims to make good on a pledge to double weekly returns to good causes from £30m to £60m by the end of the licence term.