UK: National Lottery trial opens as Desmond challenges UKGC and Allwyn
Billionaire Richard Desmond has taken his long-running dispute with the UK Gambling Commission (UKGC) to the High Court, in a case that could place a bill worth hundreds of millions of pounds on the public purse.
According to The Guardian, Desmond and his companies, Northern & Shell and The New Lottery Company (TNLC), are suing the regulator for up to £1.3bn, alleging serious flaws in the competition process that awarded the National Lottery licence to Czech-owned Allwyn in 2022. The ten-year licence, the largest public sector concession in Britain, handed control of the Lottery to Allwyn in February 2024, bringing an end to Camelot’s 30-year run. The High Court case, opening this week in London, has thrown a spotlight on the Commission’s handling of the tender.
A ‘national treasure’ under scrutiny
The Gambling Commission has recently reaffirmed its determination to defend Allwyn’s stewardship of the National Lottery. Speaking at an industry event, chief executive Andrew Rhodes stressed Allwyn’s investment in harm-reduction initiatives such as staff training and retailer engagement, describing the operator’s approach as “vital and welcome.”
He argued that despite being one of the “lowest risk products” under the regulator’s remit, the Lottery must maintain high standards of participant protection, given its visibility and role in public life.
Rhodes also described the Lottery as “a national institution, a national treasure and one that we at the Gambling Commission take great pride in being a custodian of.”
Rhodes stressed the scale of its contribution to society, noting that the Lottery raised more than £1.8bn for good causes in the last financial year, with a further £485m collected in the first quarter of this year. “Just step back for a moment and think about the scale of change that money is able to deliver in communities up and down this country,” he told delegates.
Desmond’s claims and the regulator’s defence
The Guardian reports that Desmond’s lawyers will argue that TNLC was unfairly penalised during the bidding process, claiming the Gambling Commission imposed undisclosed criteria and failed to provide feedback that might have improved the company’s chances. They also allege conflicts of interest within the process and say Allwyn should have been disqualified for breaching rules around media briefings.
One of Desmond’s key arguments concerns Allwyn’s ownership structure and links to Russia. As revealed in documents and emails reported in 2024, the UKGC was aware during the selection process that Allwyn’s parent company, KKCG, had joint ventures with Russian state-owned enterprises, including Gazprom. Despite this, the regulator told Allwyn that these ties were “not relevant” to its application. Critics, including former Conservative leader Iain Duncan Smith, argued that awarding a £6.5bn contract to a company with Russian links was “deeply concerning” and raised questions about transparency. It later emerged that while the Commission reassured MPs that the ties would be severed within days of Allwyn’s appointment, it took nearly two years for the process to be completed, with Gazprom retaining a small residual stake until the final stages.
A second strand of Desmond’s case focuses on the post-award adjustments made to Allwyn’s contract. His team argues that these changes should have triggered a rerun of the competition and is seeking damages equivalent to lost earnings, potentially as high as £1.3bn.
The Gambling Commission, however, insists its process was robust. It has described Desmond’s bid as “fanciful,” claiming it scored poorly in the rigorous evaluation. Allwyn has joined the regulator’s defence, arguing that its reputation is at stake.
Mounting costs and wider implications
While the outcome remains uncertain, the financial stakes are already being felt. As reported last month, the Commission’s lottery-related costs have ballooned, with legal bills alone jumping from £400,000 to more than £13m in a year. Over the same period, its total National Lottery–related expenditure rose to £28.8 million, in part driven by the legal dispute with Desmond.
For Desmond, who has already spent millions pursuing legal action, the case represents an effort to recoup what he says were wasted bid expenses and lost business opportunities, according to the Guardian. He has previously rejected a settlement offer of about £10m.
For the Gambling Commission and Allwyn, the priority is to protect the credibility of a system that funds sports clubs, heritage projects, and charities across the UK. As Rhodes warned, the National Lottery’s scale and profile mean it is “only ever one slip away from headlines.”
If Desmond wins, any payout would first be drawn from the Lottery’s fund for good causes, which takes in about £30m a week. Should that prove insufficient, taxpayers could be left footing the bill, a prospect that adds further political weight to what is already one of the most closely watched court cases of the year.
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