04.12.2023

by Antoni Majewski

Richard Desmond Sues Gambling Commission Over National Lottery Bid Rejection

Richard Desmond, a notable media tycoon, has initiated a legal battle against the Gambling Commission following the rejection of his bid to operate the UK National Lottery. This lawsuit, rooted in EU law, could potentially impact the funds allocated to charitable causes.

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Desmond’s company, Northern & Shell, had competed for a 10-year contract, valued at £6.5 billion, to run the National Lottery from next year. However, the Gambling Commission awarded the contract to the Czech-owned operator Allwyn, concluding a contentious bidding process. Desmond’s bid was described as “fanciful” by the commission.

The Basis of Desmond’s Legal Claim

The lawsuit revolves around alleged errors in the commission’s assessment of the bids. Desmond claims that the Gambling Commission did not treat all bids equally, failed to provide adequate feedback, and made mistakes in scoring the proposals. He seeks up to £200 million in damages, alleging multiple flaws in the secretive auction process.

Implications for Charitable Causes

The chief executive of the Gambling Commission, Andrew Rhodes, has expressed concern that any damages paid as a result of the lawsuit could be sourced from lottery funds dedicated to good causes. This sentiment was echoed by a source familiar with the regulator’s funding.

Political and Public Response

Conservative MP Damien Moore urged Desmond to abandon the lawsuit, highlighting the potential impact on British charities and social enterprises. He emphasized the need to accept the Gambling Commission’s decision and focus on the National Lottery’s future.

Desmond’s Justification for the Lawsuit

Northern & Shell argues that their bid was backed by significant financial support from major institutions and was dismissed unfairly by the regulator. The company insists that the legal action aims to uphold transparency and fairness in the bidding process.

Comparative Performance of Bids

The Gambling Commission rated Desmond’s proposal considerably lower than those of Allwyn and Camelot, particularly in areas like contribution to good causes and overall business plans. Desmond scored 57.5%, compared to Camelot’s 85.7% and Allwyn’s 87.2%.

Previous Legal Actions and Settlements

Camelot, the former operator of the National Lottery, also pursued legal action against the license award but later withdrew its lawsuit and settled with Allwyn for £100 million. Desmond is seeking £17.5 million to cover the cost of his bid, in addition to further unspecified damages.

Our Comment on the Article

Richard Desmond’s legal challenge against the Gambling Commission highlights the complex and often contentious nature of high-stakes public procurement processes. The case raises significant questions about transparency and fairness in the bidding process for large-scale public contracts. While Desmond’s pursuit for damages is based on perceived flaws in the process, the potential redirection of funds from charitable causes to legal settlements poses a moral dilemma.

This lawsuit underscores the delicate balance regulators must maintain between ensuring fair competition and safeguarding public interest, particularly when significant community resources are at stake.

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