Richard Desmond hit with £40m bill over ‘fanciful’ lottery feud

Media tycoon Richard Desmond’s company Northern and Shell has been ordered to pay over £40m after a two-year-long legal feud with the Gambling Commission over the 2022 National Lottery license.

A High Court judge has ordered media giant Northern and Shell and its subsidiary, the New Lottery Company, to cough up 75 per cent of the punitive costs immediately, with the balance expected to be over £40m. 

The order stems from a dispute over the Gambling Commission’s award of the fourth national lottery licence – a 10-year contract to operate the UK’s National Lottery.

Northern and Shell launched the lawsuit in 2022 against the Gambling Commission after losing the bidding process to Allwyn, a gambling group owned by the Czech billionaire Karel Komárek. 

Desmond’s company alleged that the Gambling Commission had made “manifest errors” in how it evaluated the bids and in how it structured and governed the competition for the UK’s largest public-sector contract, worth £6.5bn. 

Desmond’s group consequently sought £1.3bn in damages for hypothetical lost earnings. 

Mrs Justice Smith described the deal as “the most financially significant procurement process in UK history” in court in April, valued at £70bn over a ten-year period. 

The procurement competition for the licence resulted in multiple litigations against the gambling regulator, including one by the previous holder, Camelot, which was later withdrawn.

Mrs Justice Smith, in April, dismissed Northern and Shell’s damages challenge entirely and ordered the company to shell out the punitive costs.

The judge also found that Desmond’s business had failed more than half of the 23 mandatory requirements to be considered a viable operator under the licence.

Hogan Lovells, the law firm acting on behalf of the Gambling Commission, said the order “brings an end” to the first legal proceedings in which Desmond’s company sought up to £1.3bn in damages. 

The firm added that it marks “a significant milestone” that brings this claim to an end.

Desmond’s media kingdom

Desmond, a British billionaire businessman, founded the media empire Northern and Shell in 1974 after beginning his career in adult magazines and adult television channels.

The Dubai-based media tycoon formerly owned and published the Daily Express, the Sunday Express and The Daily Star before selling them to Reach plc in 2018. 

In 2011, the businessman launched the Health Lottery to raise money for health-related charities across the UK, which is where Desmond’s group focuses most of its time. 

Last June, Northern and Shell’s profits surged ahead of the legal battle beginning in the High Court, achieving a pre-tax profit of £42.7m for 2024, up from £15.8m in 2023.

Northern and Shell was contacted for comment.