Richard Desmond faces £15m demand in High Court lottery row
Richard Desmond is facing a demand to put up a £15m bond as part of his acrimonious legal battle over the National Lottery.
The Gambling Commission has asked the High Court to strike out Mr Desmond's case against it unless he pays the sum into the Court's bank account or puts his property interests on the line ahead of the trial.
So-called 'Security for Costs Orders' require claimants – in this case Mr Desmond – to provide financial security to cover the defendant's legal costs if the claim fails. The instruments are used in instances where there is concern the claimant may not be able to afford the legal bill.
If the billionaire fails to provide the necessary sum in cash, the Commission, together with lottery operator Allwyn, has requested a 'signed guarantee from Northern & Shell Properties Limited' – the entity that owns and manages Mr Desmond's property empire.
Forcing the claimant to provide a signed guarantee, especially of a large fund like £15m, is rare, according to an industry source. A court hearing is scheduled for next week.
It is the latest twist in an increasingly rancorous spat. Mr Desmond is suing the Gambling Commission for failing to award him the fourth National Lottery licence. The 10-year contract was instead handed to Allwyn, which is owned by Czech billionaire Karel Komarek.
Mr Desmond has said he is seeking £200m in damages because he thinks the bidding process was unfair.
The regulator estimates that the total legal bill for the case is likely to reach £30m, yet the last set of published accounts for Mr Desmond's Northern & Shell, which cover the period to the end of December 2023, show it sitting on cash of £20.8m.
Sources close to Northern and Shell rejected the suggestion that Mr Desmond was unable to meet the legal costs of the case.
'There is more than enough for Northern and Shell to fight to the bitter end,' one source said.
Another claimed that Mr Desmond's holding company had £300m of 'realisable assets' and dismissed the action as 'deflection' and an 'over-reaction'. The regulator was 'flying a kite', the same source said.
A Commission spokesman said: 'We do not comment on ongoing legal proceedings.'
Taxpayers to foot the bill
If Mr Desmond wins the case, it is expected that taxpayers will foot the bill in one form or another.
In 2022, Chris Philp, the then gambling minister, stated that the matter would be settled either with Treasury funds or from the money that the National Lottery sets aside for charitable causes.
The Commission offered £10m of taxpayers' money to settle the case late last year but Mr Desmond rejected the proposal, setting the stage for a High Court showdown in the Autumn.
Last week, the High Court ruled that Mr Desmond can use a cache of documents mistakenly handed over to his lawyers by the Commission's legal team at Hogan Lovells.
Sa'ad Hossain KC, representing Northern & Shell, described the scale of the apparent error as 'unprecedented' and akin to a 'bombshell'.
Allwyn, meanwhile, has suffered a series of setbacks since taking control of the lottery last year amid a costly and complex IT overhaul. The lottery is on course to generate around £1.6bn in donations for charitable causes in its maiden year under Allwyn, more than £2bn short of where returns were expected to be.
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