Three years after the UK Gambling Commission (UKGC) awarded the fourth National Lottery licence to Allwyn, the topic is still causing a headache for the regulator.
According to the 2024/25 annual reports from both the UKGC and the National Lottery Distribution Fund (NLDF), the regulator is putting more resources into its legal operations.
As of March 2025, total UKGC operational costs related to National Lottery regulation rose from £14.4m in 2023/24 to £28.8m, while legal fees rose hugely from £400,000 to £13.4m.
Much of this will be related to the ongoing lawsuit faced by the UKGC from billionaire Richard Desmond, owner of the New Lottery Company and Northern & Shell, which contested the fourth National Lottery licence.
The contest ended with Allwyn being named the preferred bidder, unseating Camelot UK, the sole operator of the National Lottery since the lottery’s inception in 1994. Camelot would mount its own legal challenge against Allwyn’s bid, but this was dropped after Allwyn agreed to acquire the firm from the Ontario Teachers Pension Plan (OTTP).
Desmond has not given up his legal challenge, however. The case is scheduled for the High Court of England and Wales in October, with Desmond seeking £200m in compensation. He was initially seeking £1.3bn but dropped it, though also turning down the UKGC’s offer of a £10m settlement.
The UKGC may have been prompted to invest in its legal teams in 2024/25 due to an error earlier in the year which saw thousands of documents accidentally sent from the regulator to Desmond’s legal team.
Judge Nerys Jefford gave Desmond’s legal team permission to use these documents, which included bid assessments and DCMS correspondence, in their challenge – given no documents involved legal advice or carry legal privilege.
With its legal opponent having been mistakenly given an edge in the battle, the UKGC may have been upping its legal costs to make sure its own case is suitably watertight.
The costs of National Lottery regulation may have other causes as well, however. The UKGC has pursued an investigation and regulatory action against Allwyn this year, as detailed in previous reports, which will have required some funding.
Returning to Desmond’s legal case, it seems that the National Lottery’s good cause funding will probably take a hit should he win in court. The £200m settlement will likely come from either the NLDF or perhaps from HM Treasury coffers.