The cost of running the UK’s gambling regulator has more than doubled over the past year as it prepares for a major courtroom clash over the awarding of the National Lottery licence.
Newly filed accounts reveal that the Gambling Commission spent £28.8 million on National Lottery-related operations in the year to March, up from £14.4 million the previous year. Much of the increase stems from spiralling legal fees, which rose to £13.4 million from just £400,000, as the regulator readies itself for a £1.3 billion damages claim brought by publishing magnate Richard Desmond.
Desmond, 73, launched the lawsuit after his company lost out on the lucrative 10-year lottery licence, which was awarded to Allwyn, owned by Czech billionaire Karel Komárek. The High Court is set to hear the case in October, in what could become one of the most costly disputes in the regulator’s history.
The Gambling Commission is partly funded by the National Lottery Distribution Fund (NLDF), which directs proceeds from ticket sales to good causes. Critics have raised concerns that escalating legal costs could divert millions of pounds from charities and community projects. “Money that should be helping communities across the UK is instead being siphoned into the courts,” one industry observer warned.
Desmond has also filed a separate £70 million claim, arguing that funds allocated for good causes by the previous operator, Camelot, amounted to a “subsidy” that should now be recovered from Allwyn. Should either case succeed, damages are expected to be drawn from the NLDF, further threatening funding for charities.
The Gambling Commission has defended its process, insisting that the competition to award the licence was “fair and robust” and that its evaluation was fully lawful. Allwyn, however, has faced a challenging start since taking over the lottery in 2024. A critical IT system upgrade — central to its pledge to more than double donations to good causes to £38 billion over the decade — suffered significant delays, prompting enforcement action from the regulator.
Despite the turbulence, the lottery itself has enjoyed strong performance. National Lottery sales climbed last year, buoyed by record EuroMillions jackpots, including a €250 million (£217 million) prize in March. The boost helped offset weaker sales of Lotto tickets and scratchcards, which were hit by the ongoing cost-of-living crisis. In total, contributions to good causes rose by £100 million to £1.8 billion.
The outcome of the High Court battle will be closely watched, with billions of pounds in charitable funding and the credibility of the Gambling Commission’s decision-making process at stake.
