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The billionaire media mogul Richard Desmond will urge a court to “err on the side of generosity” in assessing a £1.3bn damages claim against the Gambling Commission that would probably have to be funded by taxpayers if he wins.
Companies owned by the former proprietor of the Daily Express, Asian Babes and Readers’ Wives are suing the gambling regulator in a bitter dispute that opens today.
Lawyers for Desmond’s Northern & Shell investment company and his lottery bid vehicle, the New Lottery Company, argue that the commission made “manifest errors” in the labyrinthine competition process for Britain’s largest public sector contract.
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.
Lawyers for Desmond’s companies say the bid competition itself was flawed, for multiple reasons, and that the process should have been rerun because the contract was changed after it was awarded.
The Dubai-based billionaire is seeking damages of up to £1.3bn. A victory for the media mogul could have a significant cost for charities and the taxpayer because any payout would have to come from a lottery pot of money set aside to fund good causes.
If the payout is larger than the fund, which is understood to receive about £30m a week from lottery ticket sales, the taxpayer would have to foot the bill.
According to court documents, Desmond’s lawyers will say that case law dictates that the courts should “err if anything on the side of the claimant” when awarding damages if it determines that the regulator is at fault for uncertainty about what would have happened had the contract been run differently.
The Gambling Commission will defend its process as robust. It has argued in legal submissions that Desmond’s bid was “fanciful” and scored “extremely badly” in a rigorous competition process.
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Allwyn is also a party to the case, in effect on the commission’s side, on the basis that its reputation would suffer if Desmond’s lawyers succeed in convincing a judge that it should not have won the bidding process.
Earlier this year, Desmond rejected a settlement offer from the commission, understood to have been worth about £10m. He has said he incurred £17.5m of costs relating to his failed bid for the lottery licence.
The case opens at the high court on Thursday.
