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Costs double
Citing fresh financials filed by the UK Gambling Commission, business media has reported the regulator’s National Lottery-linked costs have risen by £14.4m ($19.4m) over the last year.
sharp spike in legal spend
For the year to March, the UKGC’s lottery-related costs of £28.8m ($39.9m) reflect a sharp spike in legal spend. The regulator’s litigation costs have risen from £400,000 ($540,924) last year to £13.4m ($18.1m).
The source of the UKGC’s financial discomfort is ex-porn baron Richard Desmond. The media kingpin, 73, aims to make the regulator hurt even more in October, when his £1.3bn ($1.7bn) lottery lawsuit goes before the High Court.
News of the soaring legal costs linked to Desmond comes at an awkward time for the UKGC, with gambling under the spotlight and the industry in a state of limbo over a proposed betting tax hike.
October showdown
The UKGC must rue the day it first crossed Desmond in 2022 when the Northern & Shell boss was one of multiple entities to file suits against the regulator over its awarding the National Lottery contract to Czech firm Allwyn Entertainment.
Suits by Camelot, International Gaming Technology, and a Flutter-owned subsidiary against the UKGC have all since folded. Desmond, however, has relentlessly pursued his lawsuit against it, even making a colossal fool of the regulator on two occasions.
The first came in December, when The Telegraph reported that the UKGC had met in secret with Desmond’s camp and offered to pay £200m ($270m) to end the suit. The UKGC’s competence was further savaged in May after Judge Nerys Jefford gave Desmond’s legal team the right to use over 4,000 sensitive documents mistakenly sent to them by the regulator.
Jefford stated the UKGC’s mess-up was an “unprecedented blunder.”
Now, as it prepares to defend itself against Desmond at trial in October, the UKGC is facing the added criticism that its legal costs are draining funds intended for charities and community projects.
Desmond doubles up
The UKGC is part-funded by the National Lottery Distribution Fund (NLDF) which directs money generated by ticket sales to good causes.
Desmond, however, has also filed a standalone £70m ($94m) suit, arguing that “funds set aside for good causes under the previous operator, Camelot, constituted a ‘subsidy’ that should now be clawed back from Allwyn.”
According to reports, should either of Desmond’s suits succeed at trial in October, the costs are likely to come out of the NLDF’s pockets.
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