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

Posted on: November 29, 2024, 07:57h. 

Last updated on: November 29, 2024, 09:00h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Britain’s gambling regulator, the UKGC, is seeking to settle a £200 million lawsuit brought by a losing bidder in the country’s £80 billion (US$101 billion) lottery tender.

UKGC, UK Lottery, Richard Desmond, Allwyn, Northern & Shell
Billionaire media mogul Richard Desmond, above, has accused the UKGC of botching the lottery bidding process. Now, the regulator appears to want to settle the case to protect funds for good causes. (Image: Evening Standard)

To that end, the agency is seeking a mediation meeting with Northern & Shell, the company owned by the billionaire publishing baron and former pornographer Richard Desmond, The Daily Telegraph reports.

Northern & Shell sued the regulator after it awarded the lottery contract to Czech lottery giant Sazka, now rebranded as Allwyn. Desmond’s company is asking for £200 million ($US153 billion) in damages. 

The lottery is one of the UK’s biggest public sector contracts. Northern & Shell argue in its complaint that the UKGC’s handling of the bidding process resulted in errors that adversely impacted its score.

Tech Nightmare     

The move to mediate comes amid growing concerns that the lingering legal wrangling is complicating Allwyn’s efforts to upgrade its tech platform, which could leave it unable to meet its commitment to charitable causes.

The upgrade has been beset by delays caused, in part, by litigation brought by losing bidders. Both the previous lottery operator, Camelot, and its tech partner, IGT, sued the UKGC separately in the wake of the tender result.

Camelot dropped the suit after Allwyn acquired the company in February 2023 for an undisclosed sum. The IGT suit was later dismissed for lack of standing.

Allwyn says the tech upgrade is a big part of its plan to double the lottery’s charitable contributions from £17 billion (US$24 billion) to £34 billion (US$43 billion) by the end of its 10-year tenure. The increase in funds for good causes was the main reason Allwyn was awarded the contract.

It had been hoped the tech upgrade would be in place in February when Allwyn officially took over the reins from Camelot. After missing several target dates for the implementation of the new technology, Allwyn is working toward a new deadline of next February, according to Daily Telegraph sources.

Catch 22

It’s possible the deadline could be shifted again to the summer, and the UKGC doesn’t want to grant another extension with the Northern & Shell case still pending because it could bolster the argument that Allwyn was not the right candidate for the job.

In an interview with the Financial Times last year, Desmond, who has operated the Health Lottery in the UK since 2011, said he doesn’t believe the bidding process was “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 has said it ran a “fair and robust competition” for the lottery contract.