Richard Desmond-linked businesses have been denied permission to keep fighting the UK National Lottery license in court, handing another legal win to the Gambling Commission and Allwyn.

The Court of Appeal decision comes after the High Court threw out every claim from The New Lottery Company Limited, known as TNLC, and Northern & Shell in April. Their case targeted the contest for the fourth National Lottery license as well as subsequent changes to Allwyn’s agreement.

After that defeat, TNLC and Northern & Shell asked to appeal parts of the judgment. Coulson LJ has now turned down each of their three proposed appeal grounds.

The decision marks another stage in a years-long fight surrounding one of Britain’s largest public contracts. Allwyn secured the 10-year license in 2022 before replacing Camelot as National Lottery operator in February 2024, bringing Camelot’s 30-year run to an end.

Desmond’s businesses were seeking up to £1.3 billion ($1.8 million) in damages. Their case claimed the bidding process contained “manifest errors” and argued that alterations made following Allwyn’s selection meant officials should have run the competition again.

They also reported spending £17.5 million ($23.6 million) putting together their unsuccessful bid.

License appeal rejected as National Lottery overhaul continues

Mrs Justice Smith rejected the entire case in April, concluding that the Gambling Commission had run the competition lawfully and fairly. Arguments that Allwyn or Camelot should have been excluded were also dismissed.

TNLC and Northern & Shell subsequently sought to bring part of their challenge before the Court of Appeal.

In refusing permission, Coulson LJ found that TNLC could not introduce a fresh legal argument, especially after that argument had specifically been excluded during the High Court proceedings. He further found that TNLC’s chances of success would have been “vanishingly small” even if a lower standard of proof applied.

With the appeal effort over, Allwyn is pressing ahead with a substantial technology revamp for the National Lottery. More than £350 million ($472 million) has been promised for modernization of systems that, according to the operator, have gone without a major technology upgrade since 2009.

Allwyn has previously attributed delays in its original schedule to the project’s size and complexity, challenges against the licensing process and dependence on outside suppliers. Meanwhile, the Gambling Commission had been weighing possible enforcement measures after the operator failed to meet a contractual transition milestone.

The regulator said the Court of Appeal outcome clears the way for that program to carry on.

A commission spokesperson said: “This is an important decision for the operation of The National Lottery and one that we welcome. The Gambling Commission ran a fair and robust competition to award the Fourth National Lottery Licence and that none of the contested changes to the Licence, in the course of its implementation, were substantial or contrary to the relevant procurement regulations.

“The decision gives resounding support to Good Causes by enabling Allwyn, with oversight from the Commission, to continue with their plans for investment in The National Lottery without further distraction. Our priority remains to continue regulating The National Lottery for the benefit of participants and Good Causes.”

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