The UK’s gambling regulator is preparing to settle a £200m claim for damages brought by media baron Richard Desmond over the running of the National Lottery.
The Telegraph understands that the Gambling Commission has requested a so-called mediation meeting with Mr Desmond’s business, Northern and Shell, at which it will propose settling the legal claim out of court. The showdown is expected to take place in the coming weeks.
It is thought there is no guarantee that any settlement will be as high as the £200m initially sought by Mr Desmond.
The move has been prompted by growing concerns that the legal dispute with Mr Desmond is complicating attempts to upgrade the technology systems underpinning the operation of the lottery, Britain’s largest distributor of charity funds.
Mr Desmond launched a High Court legal challenge after the Gambling Commission handed the fourth National Lottery licence to Czech operator Allwyn over Northern and Shell and incumbent Camelot, which had run the National Lottery since its inception in 1994.
Allwyn, which is controlled by gas tycoon Karel Komarek, took over the lottery in February but its stewardship has been beset by problems including a botched attempt to change technology providers.
The company decided to bring in a new supplier of the IT systems that power the lottery but the changeover has been repeatedly delayed and is expected to be pushed back again in the coming weeks.
The tech switchover is crucial to Allwyn’s plans to introduce new games, which it claims will enable it to double the lottery’s contributions to good causes from £17bn to £34bn by the end of the 10-year licence.
It is understood that the regulator’s climbdown is being driven by an expectation that the deadline for the IT upgrade will have to be extended again. It is believed that the commission does not want to have to grant an extension while Mr Desmond’s legal action is hanging over it.
Officials are said to be concerned that another postponement would be seized upon by Mr Desmond to support his claim that it was a mistake to award Allwyn the licence, and also that the regulator failed to run a proper auction process.
Mr Desmond’s Northern and Shell group filed a procurement lawsuit against the Gambling Commission in February over the decision, and at a High Court hearing in June it branded the process “seriously flawed”, accusing the Commission of providing “unfairly favourable treatment to Allwyn”. He has also previously questioned Allwyn’s suitability, telling the Financial Times last year: “They have no experience in the UK.”
