Failed UK Lottery Bidder Continues to Fight the UK Gambling Commission

Posted on: December 4, 2023, 07:28h. 

Last updated on: December 9, 2023, 03:04h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Billionaire media magnate Richard Desmond remains undeterred in his battle against the UK Gambling Commission (UKGC) over his failed attempt at the National Lottery concession. He has now turned to European Union law as his latest avenue to contest the decision.

Richard Desmond (right) with former British PM Boris Johnson
Richard Desmond (right) with former British PM Boris Johnson. Desmond is suing the UK Gambling Commission for not winning the National Lottery contract. (Image: The Daily Mail)

Through his company, Northern & Shell’s New Lottery Company, Desmond lost the bid for the 10-year contract to operate the lottery. Allwyn takes over the new contract from Camelot beginning next year, although it’s already in place.

His claim centers on allegations of unfair treatment by the gaming regulator throughout the selection process for the National Lottery operator. Desmond contends that the UKGC’s handling of the competition resulted in errors that adversely impacted Northern & Shell’s scoring.

The controversy arose when Allwyn secured the coveted contract, beating out the incumbent, Camelot, leaving Desmond’s aspirations in the dust. The Guardian reports that Desmond has fought the outcome incessantly and has initiated legal action against the UKGC, seeking ￡200 million (US$253.32 million) in damages.

Broader Impact

Camelot and Allwyn received significantly higher scores of 85.7% and 87.2%, respectively, while Desmond’s company lagged behind at 57.5%. One of the biggest issues was allegedly the stingy but unspecified amount of money the New Lottery Company was willing to give to charities.

Desmond asserts that had the UKGC provided feedback on Northern & Shell’s proposal early on in the approach, he might have opted to withdraw the bid or made transformations to be more competitive.

If Desmond’s legal pursuit proves successful, the payout would be sourced from lottery revenue. This outcome could potentially divert funds earmarked for charitable causes, raising concerns about the broader impact on societal initiatives supported by the lottery.

The UKGC, as it has had to do when facing other lawsuits over the National Lottery, will cover the cost of any legal action with those same funds.

EU Law Violations

Desmond claims the UKGC’s actions may violate the UK’s 2018 EU Withdrawal Act, which was crucial in facilitating the country’s departure from the European Union (EU). Enacted on June 26, 2018, the Act aimed to ensure a smooth transition by converting existing EU laws into domestic legislation, preventing legal vacuums post-Brexit.

Key provisions included the repeal of the European Communities Act 1972, which initially brought the UK into the EU. The 2018 Act granted ministers the power to make necessary amendments to legislation through statutory instruments, streamlining the adaptation of laws post-Brexit. This sparked debates about the balance between executive power and parliamentary oversight.

The Act also solidified the transition period, maintaining the status quo until Dec. 31, 2020, during which the UK and EU negotiated their future relationship. It allowed for a gradual adjustment and provided legal certainty for businesses and Brits.

The legislation also touched upon transparency and fair competition, while aligning with the broader objectives of the UK’s post-EU regulatory environment. This, asserts Desmond, is where the UKGC has significantly failed.

In his estimation, the regulator didn’t conduct a transparent bidding process nor allow for fair competition. Should the case get that far, he’ll have to prove that in court.