UK Gambling Commission Costs Double as Regulator Fights Lottery Lawsuit

The UK Gambling Commission has revealed that a lawsuit brought by Richard Desmond against the regulator is having a huge financial impact.

Newly filed accounts show the Gambling Commission’s costs relating to the National Lottery surged to £28.8 million ($38.9m) in the year ending in March 2025, up from £14.4 million ($19.45m) in the previous 12-month period.

Of the costs, £13.4 million ($18.1m) related to litigation, up from just £400,000 the previous year. The regulator is preparing for a legal fight against Desmond, with a trial set to begin in October.

Desmond is suing the Gambling Commission after it failed to award him the fourth National Lottery licence. The 10-year contract was instead handed to Allwyn, a rival owned by Czech billionaire Karel Komárek.

The 73-year-old former owner of the Daily Express and Channel 5 claims that the bidding process was unfair and is seeking £1.3 billion ($1.76bn) in damages as a result.

Desmond Challenges Lottery License Decision

Allwyn was awarded the fourth National Lottery licence in 2022, taking over from Camelot in February 2024. Desmond’s companies, Northern & Shell and The New Lottery Company, applied for a license, but their proposal was rejected.

Northern & Shell is the company behind the Health Lottery in the UK, which launched in 2011. Approximately 20% of its turnover is allocated to charity, with grants distributed by the People’s Health Trust.

In comparison, the National Lottery diverts around 28% of ticket sales to charitable causes. Camelot, the previous operator of the National Lottery, protested against the launch of the Health Lottery, arguing that it was taking money away from charitable causes and in favor of more profits for Desmond.

Both lotteries remain operational and have experienced increases in ticket sales recently. Stories of jackpot winners help to boost sales, and Allwyn is relaunching the famous “It Could Be You” campaign that launched the National Lottery back in 1994.

The revamped ad campaign will feature some of the biggest jackpot winners over the years.

Allwyn Faces Criticism From Gambling Commission Over System Failures

While the Gambling Commission fights to defend its decision to award Allwyn the rights to run the lottery, it is also taking action against the operator.

When awarding the license, the Commission stated, “Allwyn has committed to investment in the National Lottery that is expected to deliver growth and innovation across the National Lottery’s products and channels, resulting in increased contributions to good causes, subject to the protection of participants and propriety.”

After taking over operations last year, the company promised to more than double charitable donations to £38 billion ($51.3bn). However, the company required a major IT upgrade to make good on their promises, and this has faced delays.

In response, the Commission initiated action against Allwyn in June this year. It said that Allwyn had failed to deliver full functionality as promised by February this year.

The combination of Allwyn’s failure to meet promised contributions to charity and the legal costs may mean good causes suffer. If Desmond wins his battle with the Commission, the money used to pay compensation will also come from funds allocated to charities.