Richard Desmond loses £1.3bn damages battle over national lottery licence

The media tycoon Richard Desmond has lost his claim for up to £1.3bn in damages from the Gambling Commission, ending a bitter dispute over the regulator’s decision not to award him the 10-year licence to run the national lottery.Companies owned by the former proprietor of the Daily Express and Channel 5 launched action against the regulator in 2022, starting a tortuous legal process in which Desmond’s costs were estimated to have reached £55m by May last year.Lawyers for his Northern & Shell investment company and his lottery bid vehicle, the New Lottery Company, argued that the commission made “manifest errors” in the labyrinthine process governing the UK’s largest public sector contract, worth £6.5bn.The media mogul claimed the commission’s mistakes caused him to incur £17.5m of needless costs in pursuing his bid. However, he was also seeking up to £1.3bn in damages to reflect hypothetical lost earnings from running the lottery.Allwyn, a new vehicle ultimately owned by the Czech billionaire Karel Komárek, won the 10-year licence in 2022 and has run the draw since 2024.On Friday, Mrs Justice Smith dismissed Desmond’s claim.“The claimants have failed to make out any case of manifest error on the part of the commission in their process claim,” she wrote.“They have also failed to establish that either [previous licence holder] Camelot or Allwyn should have been disqualified from the competition, whether by reason of incumbency advantage (Camelot) or conflict of interest (Allwyn).“The competition that was conducted for the award of the fourth licence reached a lawful outcome.”Dubai-based Desmond – who also used to own the Daily Star, OK! magazine, Asian Babes and Readers’ Wives – subsequently launched a series of legal challenges linked to the decision, rejecting a £10m settlement offer.The former Tory donor and Brexit backer, who invoked EU law in his suit against the commission, claimed that the regulator presided over a flawed process that should have been rerun.He urged the court to “err on the side of generosity” in assessing his claim for up to £1.3bn in damages, which would probably have been funded from the pot of lottery money allocated to good causes.Desmond had previous failed with a separate claim that Allwyn had received an unlawful £70m marketing subsidy from the Gambling Commission.