The cost of running the UK’s gambling regulator has doubled in the past year as it prepares for a high-stakes legal showdown over the awarding of the National Lottery licence.
Newly filed accounts show that the Gambling Commission’s costs linked to the National Lottery soared to £28.8m in the year to March, up from £14.4m the year before. The surge reflects mounting legal fees as the regulator prepares to defend itself against a £1.3bn damages claim from publishing tycoon Richard Desmond.
Desmond, 73, is suing the Commission after his company failed in its bid to win the lucrative 10-year licence, which was awarded instead to Allwyn, owned by Czech billionaire Karel Komárek. The case is scheduled to begin at the High Court in October.
The Commission’s work is partly funded through the National Lottery Distribution Fund (NLDF), which channels money raised by ticket sales to good causes. However, as the regulator’s litigation costs spiral — up to £13.4m last year from £400,000 previously — critics warn that funds meant for charities and community projects are being drained into the courtroom.
Desmond has also filed a separate £70m claim arguing that funds set aside for good causes under the previous operator, Camelot, constituted a “subsidy” that should now be clawed back from Allwyn. Should either claim succeed, damages are also likely to be drawn from the NLDF.
The Gambling Commission insisted it had run a “fair and robust” competition and said its evaluation process was lawful. Allwyn, meanwhile, has faced difficulties since taking over the lottery early last year. A major IT system upgrade, deemed critical to its promise to more than double charitable donations to £38bn, was beset by delays, prompting enforcement action by the regulator.
Despite the turbulence, National Lottery sales rose last year thanks to record EuroMillions jackpots, including a €250m (£217m) prize in March. That helped offset declines in Lotto and scratchcard sales during the cost of living crisis. Overall, money raised for good causes rose by £100m to £1.8bn.
