A long-running legal battle over how the most recent National Lottery supply contract was awarded could see media mogul Richard Desmond paid up to £200 million by the Gambling Commission.
Desmond, who spearheaded the bid of Northern & Shell, has claimed that the regulator’s process was unfair and ‘seriously flawed.’
He launched a lawsuit against the Gambling Commission back in February, seeking damages after accusing the regulator of unfairly favouring Allwyn, the successful bidder.
Many thought that the case was simply sour grapes on the part of Desmond, but the decision to settle would suggest that the Commission’s legal team have decided it would be in the best interests of their client to walk away before the matter heads to the High Court in 2025.
Case Closed
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Although it seems unlikely that Desmond will receive the full £200 million that he is seeking, the fact that the Gambling Commission has called for a mediation meeting would suggest that they are willing to make a substantial payment to close the case down.
Northern & Shell launched their legal bid after the Gambling Commission recommended that the Czech operator Allwyn be chosen to take over the running of the National Lottery from the incumbent supplier, Camelot.
Desmond’s legal team have argued that the selection criteria that the regulator used were flawed and unfair, with Desmond himself commenting that ‘they [Allwyn] have no experience in the UK’, despite their large-scale lottery operations on European soil.
The transition period from Camelot, who ran the lottery since its inception in 1994, to Allwyn has been riddled with issues – not least the new supplier’s tech woes.
They were supposed to have new systems in place by the summer, which would have made the National Lottery more streamlined and allow the firm to offer a new range of lottery games.
A separate legal case involving software supplier IGT has hardly helped matters. They took Allwyn to the High Court in 2023 over a dispute over their supply contract, with the case rumbling over into this year.
That was made even more complicated when IGT tried to sue the Gambling Commission for damages over the awarding of the National Lottery supply contract to Allwyn, although that case was kicked out by the Court of Appeal.
However, the switchover to their new technology has been delayed numerous times; something that Desmond and his legal team could latch onto in their argument that Allwyn should not have been chosen in the first place.
His legal team struck a blow in June when a High Court judge ruled not to allow a split trial as requested by the Gambling Commission. That would have ‘limited the scope of evidence’, with a single. Comprehensive trial allowing Northern & Shell to argue their case in full.
The most important element of the fallout is that the delays in introducing the new tech could derail Allwyn’s commitment to doubling the amount of money raised for charity from the lottery.
They had pledged an ambitious increase if selected as the preferred supplier, promising £34 billion by the end of their ten-year contract, but forecasts suggest they are still well below sales targets for 2024.
Musical Chairs
Playing out in the backdrop of all this is the decision of the current chairman of the Gambling Commission, Marcus Boyle, to step down from his role.
He has been at the helm since 2021 and through some tough times for the regulator, which have seen their relevance and authority questioned in the light of the previous government’s industry White Paper and overhaul of the Gambling Act legislation.
Marcus Boyle to step down as UKGC chair in January 2025 👀🇬🇧
👉 https://t.co/mTOOruT4np#igaming #regulation #gambling
— NEXT.io (@nextdotio) November 28, 2024
Boyle was also at the helm throughout the National Lottery debacle, although it’s not thought that the fallout from that had any impact on his decision.
Baroness Twycross, the gambling minister who this week set out plans for maximum stakes on online slot games and a mandatory industry levy amongst a raft of changes, said of Boyle:
“The past three years have been very significant for the Commission, as it takes forward measures set out in the Gambling Act Review and the start of the fourth National Lottery licence.
“I am grateful for Marcus’s hard work and commitment to the Gambling Commission and public service over his tenure and wish him the best for his future endeavours.”
Boyle will remain in his position until the end of January, at which point his successor will be revealed.