Richard Desmond will learn whether he has won his £1.3billion battle with the Gambling Commission over alleged mistakes in the awarding of the National Lottery franchise in the New Year.
The New Lottery Company [TNLC], owned by Mr Desmond, was one of the bidders for the fourth National Lottery licence, with the competition overseen by the Gambling Commission.
The licence was won by Allwyn, which later bought Camelot, the incumbents, who took second place. TNLC came third.
But TNLC claims that “manifest errors” were made in the way the process was run.
It argues that these mean that Allwyn ought to have been disqualified.
It also claims that modifications made after the contract was won, including a potential two-year extension to the licence, should have triggered a re-run of the contest.
Had this happened, TNLC claims, it would have had a chance of winning.
It is seeking compensation of up £1.3billion, including claiming for “loss of chance” if the competition were not to be run again.
The licence was won by Allwyn, which later bought Camelot, the incumbents, who took second place. TNLC came third
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It has been alleged that TNLC lacked funding - but the court heard that, thanks to parent company Northern & Shell, it was in fact “extremely well resourced, with significant funds and assets at its disposal”.
The High Court has heard weeks of evidence, with witnesses from the Gambling Commission, Allwyn and TNLC.
A ruling is expected early in the New Year. Mark Howard KC, closing the case for Allwyn, argued that TNLC had not been a realistic contender for winning the fourth National Lottery competition (4NLC).
He claimed it would have done no better even if there were a re-run, or a ‘5NLC’.
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Richard Desmond is suing the Gambling Commission | PAHowever, TNLC argues that it would have improved its bid for a re-run and had a chance of success.
Mr Howard said: “TNLC claims it should have won 4NLC or at least had the chance of winning the putative 5NLC. It seeks damages of a colossal amount of no less than £1.3billion and yet what do we actually know?
“What we do know is that they failed in 4NLC dismally. The cause of that failure appears to have been an inability or unwillingness on behalf or TNLC, or its parent company, to commit sufficient funding.”
He went on: “We suggest you should have no difficulty at all in to conclude that TNLC was a hopeless applicant for 4NLC and would have fared no better in a putative 5NLC. They had no realistic chance of success.”
A key reason for TNLC’s failure had been a lack of finance, said Mr Howard. He argued that this would still be the case in a hypothetical 5NLC.
He told the court: “A fundamental problem with their bid was their approach to financing.
“Despite knowledge of the requirements, TNLC didn’t provide the required financing.“The only conclusion you can draw from that is either that they didn’t have the money or they weren’t prepared to put it up.
”But Daniel Toledano KC, for TNLC, denied the allegation, telling the court that TNLC, through its parent company Northern & Shell, was “extremely well resourced”.
It would have put more funding into a re-run contest which it would have sought to win, he said,
He said that the Gambling Commission should have run the competition again in the light of the modifications to the contract.
He reminded the court that Richard Martin, Group Commercial Director at Northern & Shell, had confirmed additional funds were available when he gave evidence.
Mr Toledano said: “TNLC and Northern & Shell would have put such resources into a 5NLC bid to address the criticisms made in the 4NLC bid, so as to seek to win 5NLC.”
Mr Martin had told the court additional funding of £48m was “easily within the group’s resources”.
Mr Toledano said: “His evidence that the group was extremely well resourced, with significant funds and assets at its disposal, was unchallenged.“
Mr Howard says we didn’t have the money or weren’t prepared to put it up. We say that is wrong on the evidence.”
TNLC originally relied on a number of claims, although many of these have been dropped.
These included arguing that Allwyn should have been disqualified for breaching a strict protocol on dealing with the media and that it failed to pass the “fit and proper” test for running the lottery.
Mr Howard suggested the changing nature of the case presented by TNLC had made it an “utter shambles”.
He said: “This is not a case In the county court, seeking compensation for a slip or a fall. This is a case claiming hundreds of millions of pounds, with huge legal resources behind it, and yet it’s what can fairly be described as an utter shambles.”
He added that the modifications to the contract relied on by TNLC only came about because Camelot had launched legal action after losing.
IGT, which worked for Camelot in running the National Lottery, then brought its own action, further slowing things down.
These circumstances couldn’t have been foreseen by the Gambling Commission, Mr Howard told the court.
“Nobody could have reasonably foreseen we were going to get this, in essence, two year delay.”
Concluding his closing remarks, he added: “There is on basis on which TNLC’s bid would have succeeded and there is no basis on which Allwyn should have failed or been disqualified.”
Mrs Justice Joanna Smith told the court she would not be making her ruling before Christmas but said: “I hope you will have something relatively swiftly in the New Year.”