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Richard Desmond invokes EU law to sue Gambling Commission 02/06/24
Multi Source
• Ex-Express owner files claim in high court that regulator made errors during bidding war for national lottery contract

Richard Desmond, the Brexit-backing media tycoon, is invoking EU law to sue the gambling regulator after it rejected his “fanciful” bid to run the national lottery. The former owner of the Daily Express has vowed previously to seek damages from the Gambling Commission after his company Northern & Shell missed out on a 10-year contract, worth £6.5bn, to run the lottery from next year.

Desmond is expected to claim that the gambling regulator made “numerous manifest errors” during a bitter and prolonged bidding war that ended when the commission named the Czech-owned operator Allwyn as the winner.

The multimillionaire, who gave £1m to the UK Independence party (Ukip) in the run-up to the Brexit referendum, will rely partly on EU laws retained after the UK’s exit from the single-market bloc, the Guardian understands.

Sources close to Desmond told the Financial Times previously that he would seek up to £200m in damages from the Gambling Commission. He is alleging multiple flaws in the secretive auction process through which the regulator assessed his own bid and those of rivals Allwyn and Camelot, which has held the licence to run the lottery since its inception in 1994.

The commission’s chief executive, Andrew Rhodes, has previously said that any damages that the regulator is forced to pay as a result of a suit by a losing bidder for the licence might ultimately come out of lottery funding dedicated to good causes. The regulator already funds the cost of fighting litigation from that pot of money.

Desmond claims that Northern & Shell and a subsidiary, the New Lottery Company, might have performed better in the licence competition were it not for mistakes by the Gambling Commission.

The regulator is understood to have delivered a scathing assessment of Desmond’s proposals, declaring the bid “fanciful” because it scored considerably lower on essential criteria than plans lodged by Allwyn and Camelot.

The regulator argued that Desmond’s proposal scored lower in categories such as the amount of money that would be devoted to good causes and the overall business plan. The total score would have been 57.5%, compared with Camelot’s score of 85.7% and Allwyn – the eventual winner – on 87.2%.

As of today British publishing group owned by media baron Richard Desmond has filed new legal action against the Gambling Commission. Desmond’s Northern and Shell and its subsidiary, the New Lottery Company, launched a procurement lawsuit against the gambling regulator.

According to the High Court filing system, the parties have instructed UK-US law firm Bryan Cave Leighton Paisner (BCLP) to bring the case to the Technology and Construction Court (TCC).

This then kicked off legal action as Camelot sued the Commission in April 2022 after it failed to secure that next licence. International Game Technology (IGT) joined Camelot in the dispute as the company provided operational software to Camelot.

In the background at the time, the New Lottery Company and Northern and Shell, which took part in the competition but were ruled out in phase one, filed a claim to the court in April 2022.

When the Camelot case went to court, Desmond’s businesses did not attend any hearings but it did have legal representative, law firm BCLP, in court watching the proceedings. His businesses were not involved in the Camelot case which proceeded to the High Court. In June 2022, the court ruled in favour of the Gambling Commission in June against Camelot and IGT. The parties went on to appeal the decision but before it went to court, Camelot withdrew their appeals. IGT then followed as they stated they had no realistic option but to withdraw its own appeal.

IGT filed a fresh claim against the Gambling Commission and Allwyn in November 2022. A court concluded in July 2023 that IGT did not have the necessary standing to bring this procurement challenge. A court ordered IGT last September to pay the legal costs for the Gambling Commission which reached nearly £4.2m after it instruction of Hogan Lovells partner Charles Brasted and Keating Chambers as counsel.

In the background, it was announced in December 2022 that Allwyn agreed to acquire the Camelot Lottery Solutions group of companies from its owners Ontario Teachers’ Pension Plan Board. That acquisition was completed last February. Earlier this month, Allwyn took over as the National Lottery operator, which marked the first time the licence changed hands in thirty years.

A spokesperson for Gambling Commission told City A.M.:”We can’t comment on any ongoing court proceedings. However, no court has yet ruled against the Commission’s decision or the lawfulness/validity of the Competition. We remain resolute that we have run a fair and robust competition, and that our evaluation has been carried out fairly and lawfully in accordance with our statutory duties.”

Northern and Shell and the New Lottery Company made no comment.