Gambling Commission costs double amid lottery licence legal dispute
The sharp increase stems from litigation costs associated with a legal challenge filed by publishing magnate Richard Desmond, who is seeking £1.3bn in damages after failing to secure the fourth National Lottery licence.
Key points:
– Gambling Commission’s National Lottery oversight costs doubled to £28.8m due to legal expenses from Richard Desmond’s £1.3bn damages claim
– Litigation costs reached £13.4m, funded through charitable good causes money via the National Lottery Distribution Fund
– High Court proceedings are scheduled to begin in October, with potential damages also likely to be paid from charitable funds
The UK Gambling Commission’s costs related to the National Lottery more than doubled last year as the regulator prepares to defend a High Court legal challenge brought by publishing tycoon Richard Desmond.
Newly published accounts show expenditure on National Lottery work rose to £28.8m ($38.9m) in the year to March, up from £14.4m in the previous period.
The increase was largely driven by legal fees, with litigation costs reaching £13.4m compared to £400,000 the year before.
The sharp rise stems from Desmond’s claim that the bidding process for the fourth National Lottery licence was unfair.
The 10-year licence was awarded to Allwyn, owned by Czech billionaire Karel Komárek, instead of Desmond’s company.
Desmond is seeking £1.3bn in damages, with the trial scheduled to begin in October.
Because the Gambling Commission’s lottery-related costs are covered through the National Lottery Distribution Fund (NLDF), which supports good causes, much of the additional expenditure has come at the expense of charitable funding.
Good to know: The NLDF has also recorded a contingent liability to cover any damages, should Desmond’s claim succeed
Allwyn, which took over the licence in early 2024, has pledged to more than double donations to good causes to £38bn. However, its operations have faced difficulties, including delays to a major IT upgrade that prompted enforcement action by the Commission.
Despite these issues, National Lottery sales grew last year, driven by EuroMillions, which recorded a €250m ($295m) jackpot in March. Contributions to good causes increased by £100m to £1.8bn.
A Gambling Commission spokesperson said it remained confident that the competition process was “fair and robust.”
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