The media tycoon Richard Desmond is set for a courtroom showdown with the Gambling Commission that could cost good causes tens of millions of pounds, the Guardian has learned, after he rejected a settlement offer linked to his failed bid to run the National Lottery.
Desmond launched a high court challenge in 2022 after the commission awarded the 10-year National Lottery licence to the Czech operator Allwyn, rejecting bids from his Northern & Shell business, as well as the incumbent Camelot.
The commission has previously indicated that any damages the regulator may be required to pay would need to be taken from the National Lottery’s good causes fund, which supports a range of charities and sporting organisations. The regulator already funds the cost of fighting litigation from that pot of money.
In a meeting in the City of London last week, mediated by lawyers from the law firm Clyde & Co, representatives of the commission and Northern & Shell discussed terms of a settlement aimed at convincing Desmond to drop the action.
The commission’s team told Northern & Shell it was authorised to offer up to £10m, according to two sources with knowledge of the talks, a fraction of the £200m Desmond is seeking.
Desmond rejected the offer, according to sources close to the billionaire, who is the former owner of Express newspapers, celebrity titles such as OK! magazine and a range of pornographic publications.
The source said Desmond was not motivated by financial concerns but instead by a desire for transparency about the process governing the award of the contract, which is worth £6.5bn in revenues over 10 years.
The collapse of talks means the two sides are destined to meet in court in October next year, unless they can return to the negotiating table and agree a new settlement offer.
In June, the Gambling Commission told the high court it would be “astonishing” if Desmond’s claim was successful, accusing him of trying to have a “second bite at the cherry” in order to secure a windfall.
Court documents have previously shown the commission found Northern & Shell’s bid had “no chance of winning”.
Desmond is understood to be angry about the process, believing the commission should have made clear his bid was unlikely to be successful much earlier, rather than allowing him to continue to rack up costs by persisting with it.
The tycoon divides his time between London and Dubai, after securing a “golden visa” from the United Arab Emirates after the general election result, which has reportedly led him to “lose confidence” in Britain.
The award of the fourth National Lottery licence wrested control from Camelot for the first time since the inception of the weekly draw in 1994.
The competition process has proved controversial, amid concerns raised by politicians about transparency and past business ties linking Allwyn’s owner – the Czech billionaire Karel Komárek – with the Russian state.
The Gambling Commission and Northern & Shell both declined to comment.
