It is not a good day for the UK Gambling Commission, as it is being reported that the gambling regulator spent twice the cost on the National Lottery last year. The UKGC regulates the UK lottery.
The doubling in spending, which rose to £28.8 million last year, was due to a lawsuit filed by prominent publisher Richard Desmond.
Desmond, 73, claims in his lawsuit that the bidding process for the fourth National Lottery license was unfair.
Thanks to litigation costs, spending on the National Lottery was up from £14.4 million the previous year.
The bid for the ten-year lottery licence was awarded to Allywyn, a leading UK-based lottery operator owned by Karel Komárek, 56, a Czech billionaire.
But what does this mean for the UKGC, and what will happen in the High Court case?
What Does The Case Mean?
The case means that Desmond is suing the Gambling Commission following the bid loss. Health Lottery, Desmond’s company is run by his other company Northern & Shell. In his case, he is seeking £1.3 billion in damages, an amount which could cost the UKGC greatly.
What makes matters worse is that while the UKGC regulates the National Lottery, part of its work is funded through the National Lottery Distribution Fund (NLDF), which uses ticket sales to donate to good causes. However, with the mounting legal fees, some people believe the money from the NLDF will be funnelled back into the courtroom, but this has not been confirmed.
Shockingly, Desmond has filed a separate £70 million lawsuit, claiming that funds set aside for charitable causes by Camelot, the operator that ran the lottery before closing in 2024, were actually a disguised subsidy. He argues that this money should be taken back from Allwyn. Allywyn took over the license in February 2024.
What Has The UKGC Said?
It seems the UKGC is determined to fight the lawsuit. On the loss of the licence, the Gambling Commission said they believe their process is “fair and robust”.
What Could The Case Mean For The UKGC In The Future?
If Desmond succeeds in proving his claims, this could have serious long-term implications for the UKGC. Here are a few potential ones:
- More costs and lawsuits – If Desmond proves his claims, the UKGC will likely face even higher legal costs and other lawsuits from potential lottery operators who do not like the way the system works.
- Policy changes – Depending on the outcome, the UKGC may need to change rules and how they regulate or allocate the lottery licence to stop such claims arising again.
- Money taken – The NLDF could lose more money from their charity fund to pay for legal costs if Desmond’s lawsuit is successful.
- Reputational damage – Depending on how the case finishes, the UKGC could face damage to its reputation for how it operates the National Lottery.
Stay tuned for updates on the case that begins next month.
