Richard Desmond Loses £1.3bn Damages Battle Over National Lottery Licence
Media tycoon Richard Desmond has vowed to appeal after a resounding defeat in his high court claim for up to £1.3bn in damages from the Gambling Commission. The dispute centers on the commission's decision not to award him the 10-year licence to run the national lottery, which was instead granted to Allwyn, a company ultimately owned by Czech billionaire Karel Komárek.
High Court Dismisses Desmond's Claim
Mrs Justice Smith dismissed Desmond's claim on Friday in a sometimes scathing written judgment. She reserved particular criticism for what she described as "inexcusable" failings on the part of Desmond's legal team. The judge wrote that the claimants failed to make out any case of manifest error by the commission and that the competition for the licence reached a lawful outcome.
Companies owned by Desmond, the former proprietor of the Daily Express and Channel 5, launched action against the gambling regulator in 2022. This initiated a tortuous legal process, with Desmond's costs estimated to have reached £55m by May last year, though sources close to him said the figure was significantly lower.
Arguments and Allegations
Lawyers for Desmond's Northern & Shell investment company and his lottery bid vehicle, the New Lottery Company, argued that the commission made "manifest errors" in the labyrinthine process governing the UK's largest public sector contract, worth £6.5bn. Desmond claimed the commission's mistakes caused him to incur £17.5m of needless costs in pursuing his bid, and he sought up to £1.3bn in damages to reflect hypothetical lost earnings from running the lottery.
Desmond, a former Tory donor and Brexit backer who invoked EU law in his suit, claimed that the regulator presided over a flawed process that should have been rerun. He urged the court to "err on the side of generosity" in assessing his claim, which would probably have been funded from the pot of lottery money allocated to good causes.
Judgment Criticisms and Responses
In her judgment, Mrs Justice Smith took aim at the "unfocused" way in which Desmond's claim was conducted, with various elements of his argument being dropped at the last minute. She noted that this led to significant time being wasted and risked leaving the court with an imperfect understanding of the case.
A spokesperson for Northern & Shell said: "They won. We lost. We appeal. It's not over." Meanwhile, a spokesperson for the Gambling Commission stated that the judgment makes clear the commission ran a fair and robust competition, supporting good causes by enabling Allwyn to continue with their investment plans without further distraction.
Allwyn, which won the 10-year licence in 2022 and has run the draw since 2024, said the decision "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."
Background and Previous Challenges
Dubai-based Desmond, who also used to own the Daily Star, OK! magazine, and other publications, launched a series of legal challenges linked to the lottery decision. He previously rejected a £10m settlement offer and failed with a separate claim that Allwyn had received an unlawful £70m marketing subsidy from the Gambling Commission.
The case highlights the intense competition and high stakes involved in the national lottery licence, a key contract in the UK's public sector. With Desmond's vow to appeal, the legal battle may continue, but for now, the high court's ruling stands as a significant victory for the Gambling Commission and Allwyn.
