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UKGC Looking to Settle Media Baron’s $200M Lawsuit Over Lottery Contract

Britain's gambling authority, the UKGC, is aiming to resolve a £200 million lawsuit filed by an unsuccessful bidder in the nation's £80 billion (US$101 billion) lottery bidding process. 

To achieve this, the agency is requesting a mediation session with Northern & Shell, the firm owned by billionaire publishing mogul and former adult content producer Richard Desmond, according to The Daily Telegraph. 

Northern & Shell filed a lawsuit against the regulator after the lottery contract was given to Czech lottery giant Sazka, which is now rebranded as Allwyn. Desmond's firm is seeking £200 million ($US153 billion) in compensation. 

The lottery ranks among the largest public sector contracts in the UK. Northern & Shell contend in their complaint that the UKGC’s management of the bidding process led to mistakes that negatively affected its score. 

Technology Dilemma 

The decision to mediate arises from increasing worries that the prolonged legal disputes are hindering Allwyn’s attempt to enhance its technology platform, potentially preventing it from fulfilling its obligations to charitable initiatives. 

The upgrade has faced numerous delays, partly due to lawsuits filed by unsuccessful bidders. Following the outcome of the tender, both the former lottery operator, Camelot, and its technology partner, IGT, independently filed lawsuits against the UKGC. 

Camelot withdrew the lawsuit after Allwyn purchased the company in February 2023 for an undisclosed amount. The IGT lawsuit was subsequently thrown out due to insufficient standing. 

Allwyn states that the technology enhancement is a significant element of its strategy to increase the lottery's charitable donations from £17 billion (US$24 billion) to £34 billion (US$43 billion) by the conclusion of its decade-long term. The primary reason Allwyn received the contract was the boost in funding for charitable causes. 

There were expectations that the technology upgrade would be implemented in February when Allwyn officially assumed control from Camelot. Following the failure to meet multiple target dates for the rollout of the new technology, Allwyn is aiming for a revised deadline of next February, as reported by sources from the Daily Telegraph. 

Catch-22 

The deadline might potentially be moved once more to the summer, and the UKGC is hesitant to allow another extension with the Northern & Shell case unresolved because it may strengthen the premise that Allwyn was not the suitable choice for the position. 

In a last year's interview with the Financial Times, Desmond, who has run the Health Lottery in the UK since 2011, expressed that he feels the bidding process was not "fair."

"They [Allwyn] have no experience in the UK,” he said. “We’ve been going since 1975, deemed fit and proper, started magazines, the Health Lottery, Channel 5.”

The UKGC stated it conducted a “fair and rigorous competition” for the lottery contract.