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Media tycoon Richard Desmond has drawn prominent business figures including former Sainsbury’s boss Justin King into his court battle over the National Lottery, naming them in the first day of a trial over the award of a lucrative 10-year contract to run the state-franchised competition.
A High Court trial began on Thursday in a case that Desmond’s Northern & Shell has brought against the UK gambling commission over claims the regulator’s licensing process for the lottery was unfair.
Northern & Shell is seeking hundreds of millions of pounds in damages after it bid unsuccessfully to run the state-franchised competition, losing out in 2022 to Allwyn, whose ultimate beneficial owner is Czech billionaire Karel Komárek.
Allwyn had assembled a roster of grandees to lead its lottery bid team, including King, the former Sainsbury’s chief, and London 2012 Olympics organiser Sir Keith Mills.
At the start of the trial, Daniel Toledano KC, representing Northern & Shell, said on Thursday that during the licensing process Allwyn “repeatedly breached” a publicity protocol designed to ensure “a level playing field” between bidders.
He cited a series of media interviews and articles, including remarks Mills made to the Financial Times in 2021 in which he said the lottery had “not kept pace with change” as online gambling lured away younger customers.
Toledano also argued in a written submission that King, who chairs Allwyn UK’s board, had referred in 2022 in “a misleading fashion to the performance of the National Lottery”.
Toledano said “the Court should find that Allwyn repeatedly breached” the protocol and that had the regulator “acted lawfully it would have disqualified Allwyn”.
King and Mills did not immediately respond to requests to comment made through Allwyn.
Both Allwyn and the Gambling Commission deny Northern & Shell’s claims. Sarah Hannaford KC, for the commission, said in written arguments that the protocol provided “guidance” for bidders and they were “not prevented” from engaging with the media.
Some of the materials Northern & Shell complained about were published “after the evaluation had concluded and so could not have affected the competition in any way”, she added.
Mark Howard KC, representing Allwyn, also said in written arguments that bidders were, in principle, “permitted to promote their interest” in running the lottery.
The Gambling Commission’s approach was “plainly lawful and it is simply fanciful to suggest that it in some way acted irrationally or outside the bounds of its discretion”, he added.
Toledano argued that, more broadly, there were “fundamental flaws” in the bidding process that “disadvantaged” Northern & Shell.
But Howard, for Allwyn, said the New Lottery Company, a subsidiary Northern & Shell set up to bid for the contract, was “owned by a property investment group with no relevant experience or track record beyond its work on the ‘Health Lottery’”.
This was “between 1000 and 2000 times smaller on an annual revenue basis than the National Lottery”, he added.
Hannaford said the commission “followed a thorough and considered procurement process, designed to reflect the regulations and ensure a level playing field”.
The seven-week trial, before Mrs Justice Joanna Smith, continues.
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