The UK Gambling Commission (UKGC) and media tycoon Richard Desmond are close to settling a £200m claim over the National Lottery licensing process.
The Telegraph understands that discussions could take place in the coming weeks as the regulator looks to resolve the legal dispute out of court by meeting with Northern & Shell.
The claim stems from the UKGC’s decision to award a fourth National Lottery licence to Czech operator Allwyn. In the process, the regulator overlooked Desmond’s application from Northern & Shell, as well as previous operator Camelot.
Allwyn, owned by billionaire Karel Komarek, officially took over the lottery in February 2023. However, the transition has been plagued by technical issues, sparking further controversy and raising concerns about the lottery’s operations.
One of the key factors behind the regulator’s willingness to mediate is repeated delays in upgrading the IT systems that underpin the National Lottery. Allwyn’s plans to upgrade the technology, part of its bid for the licence, have repeatedly hit setbacks.
The upgrade process has been a major challenge for Allwyn, with multiple missed deadlines. The company currently aims to complete the work in February 2025, but insiders suggest that could be further delayed, possibly into the summer or even later, if technical issues persist.
In the lawsuit, Desmond’s company alleged that the UKGC mishandled the licence application process. The company also questioned Allwyn’s suitability to run the lottery, citing its lack of experience in the UK.
Some technology experts have likened the difficulties of the transition to trying to integrate incompatible systems, often compared to “installing a Microsoft system on an Apple computer”.
The problems stemmed from an earlier dispute with International Games Technology (IGT), Camelot’s previous technology provider since the National Lottery’s inception. IGT challenged the decision to grant Allwyn the lottery licence and sued for damages in the High Court.
IGT eventually dropped the case after reaching a new technology partnership with Allwyn. However, the legal battle led to a six-month delay in finalising the licence, further exacerbating the renewal issues.
The delay, in turn, has drawn criticism from industry figures and cast doubt on Allwyn’s ability to meet its fundraising targets. The company had set itself the goal of doubling lottery contributions to charities from £17bn to £34bn over the next decade.
However, with sales currently failing to meet forecasts, those targets are looking increasingly out of reach.
While the settlement would bring some closure to the legal dispute, it remains unclear whether it will come close to the £200m Desmond originally sought.
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