UKGC Looking to Settle Media Baron’s $200M Lawsuit Over Lottery Contract

Britain's gambling authority, the UKGC, aims to resolve a £200 million lawsuit filed by an unsuccessful bidder in the nation’s £80 billion (US$101 billion) lottery bid. 

To achieve this, the agency is requesting a mediation session with Northern & Shell, the firm owned by billionaire publishing mogul and ex-pornographer Richard Desmond, as reported by The Daily Telegraph. 

Northern & Shell filed a lawsuit against the regulator after the lottery contract was granted to Czech lottery giant Sazka, which is now known as Allwyn. Desmond's firm is seeking £200 million (US$153 million) in compensation. 

The lottery is among the largest public sector contracts in the UK. Northern & Shell claim in their complaint that the UKGC’s management of the bidding process led to mistakes that negatively affected its score. 

Technology Disaster 

The decision to mediate arises from increasing worries that the ongoing legal disputes are hindering Allwyn’s attempts to enhance its technology platform, potentially jeopardizing its ability to fulfill its obligations to charitable initiatives. 

The enhancement has faced delays, partly due to lawsuits filed by unsuccessful bidders. The former lottery operator, Camelot, along with its technology partner, IGT, individually filed lawsuits against the UKGC following the outcome of the tender. 

Camelot discontinued the lawsuit after Allwyn purchased the company in February 2023 for an undisclosed amount. The IGT lawsuit was subsequently dismissed due to insufficient standing. 

Allwyn states that the technological enhancement is a major element of its strategy to increase the lottery’s charitable donations from £17 billion (US$24 billion) to £34 billion (US$43 billion) by the conclusion of its decade-long term. The primary reason Allwyn received the contract was the rise in funding for charitable initiatives. 

There was optimism that the technology upgrade would be implemented in February when Allwyn formally assumed control from Camelot. Following missed target dates for the rollout of the new technology, Allwyn is aiming for a new deadline of next February, as per sources from the Daily Telegraph. 

Catch-22 

The deadline may potentially be postponed again to the summer, and the UKGC is hesitant to provide another extension with the Northern & Shell case unresolved, as it might strengthen the claim that Allwyn wasn't the suitable choice for the position. 

In a Financial Times interview last year, Desmond, the operator of the Health Lottery in the UK since 2011, expressed that he thinks the bidding process was not "fair."

"They [Allwyn] have no experience in the UK,” he said. “We’ve been going since 1975, deemed fit and proper, started magazines, the Health Lottery, Channel 5.”

The UKGC stated it conducted a "fair and thorough competition" for the lottery contract.