Business mogul Richard Desmond has partially withdrawn elements of his £1.3 billion lawsuit against the UK Gambling Commission over the awarding of the fourth National Lottery licence, just months before the case is due to go to trial in October.
Desmond’s companies, Northern & Shell and The New Lottery Company, are challenging the Commission’s 2022 decision to award the decade-long contract to Allwyn, a Czech-owned lottery operator, which took over from previous licence-holder Camelot. Allwyn, owned by billionaire Karel Komarek, is listed as an interested party in the proceedings.
The withdrawn claims relate to specific allegations around how the Commission evaluated bids, though Desmond’s legal challenge remains largely intact. The case continues to centre on claims that the bidding process lacked fairness and transparency, with Desmond maintaining that his consortium was treated unfairly.
Despite the narrowing of the case, the stakes remain high. If Desmond succeeds, it is likely that UK taxpayers could bear the cost of any compensation, either through Treasury funds or resources otherwise destined for the National Lottery’s charitable causes.
The Gambling Commission is reported to have offered Desmond a £10 million settlement last year, which was declined. Since then, the case has evolved into one of the most prominent procurement legal challenges in recent UK history.
In June, Desmond secured a procedural win when the High Court refused Allwyn’s request for him to post £15 million as security for legal costs. However, lawyers acting for Allwyn have warned that Desmond could face up to £55 million in costs should he lose the case.
Questions have been raised about the financial capacity of Desmond’s firms to sustain the legal proceedings. The New Lottery Company posted a pre-tax loss of £127,000 in 2023, but Northern & Shell reported cash reserves of £20.8 million. Desmond’s legal team has strongly defended their client’s position, arguing that the companies are well-resourced and committed.
“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 Desmond. “Any such cost would be an insignificant proportion of its assets.”
With the trial set for autumn, Desmond’s partial withdrawal may streamline the legal arguments, but the core of the £1.3 billion dispute remains unresolved. The case is expected to shed light on the high-stakes world of public contract bidding and its implications for taxpayer liability.
