Court of Appeal Rejects TNLC Bid to Revive National Lottery Licence Challenge

The Court of Appeal has refused The New Lottery Company Limited (TNLC) and Northern & Shell PLC permission to appeal the High Court's ruling over the award of the fourth National Lottery licence, leaving the April 2026 judgment intact and confirming that the claimants remain liable for indemnity costs throughout the proceedings.

The legal battle over the fourth National Lottery licence has been ongoing since April 2022, when the procurement process became the subject of multiple court challenges. Those proceedings delayed the formal award of the licence until September 2022. On 30 July 2026, however, the Court of Appeal brought the latest stage of the litigation to an end by refusing TNLC and its parent company, Northern & Shell, permission to appeal the High Court's dismissal of their claims against the Gambling Commission.

Northern & Shell, the investment company owned by Richard Desmond, together with its lottery bidding vehicle, The New Lottery Company, unsuccessfully competed for the fourth National Lottery licence, which was ultimately awarded to Allwyn. Following their defeat in the competition, the companies launched legal action against the Gambling Commission, alleging that the procurement process had been conducted unlawfully and arguing that TNLC should have been selected as the successful bidder. They also claimed that subsequent changes agreed between the Commission and Allwyn amounted to unlawful alterations of the licence under procurement regulations.

In April 2026, the High Court rejected both grounds of challenge. TNLC and Northern & Shell later sought permission to appeal only the second aspect of the case, concerning the alleged post-award modifications to the licence.

The Court of Appeal declined to grant permission. Lord Justice Coulson concluded that TNLC's proposed appeal relied in part on arguments that had already been rejected by the High Court. He further found that the company's prospects of success would have been "vanishingly small" in any event and determined that it had suffered no practical loss. As a result, the High Court's April judgment remains in force.

Responding to the decision, a spokesperson for the Gambling Commission welcomed the outcome, stating:

"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 Commission said the ruling enables Allwyn to continue implementing its planned investment programme for the National Lottery without further legal uncertainty. It added that its ongoing priority remains regulating the National Lottery for the benefit of participants and the good causes it supports.

The original High Court proceedings involved substantial financial claims. TNLC and Northern & Shell sought damages of up to £1.3 billion, in addition to approximately £17.5 million representing the costs of preparing their unsuccessful bid.

In her April judgment, Mrs Justice Joanna Smith found no manifest error in the Gambling Commission's evaluation process. She concluded that neither Camelot nor Allwyn should have been disqualified from the competition and ruled that the procurement exercise had been conducted lawfully, resulting in a valid outcome.

The financial consequences for the claimants were reinforced in a separate costs ruling delivered on 22 May 2026. Mrs Justice Smith ordered that TNLC and Northern & Shell pay indemnity costs to both the Gambling Commission and Allwyn. Pending either agreement between the parties or a detailed assessment by the court, the claimants were ordered to make interim payments covering 75% of the Commission's costs and 70% of Allwyn's costs.

Indemnity costs are reserved for cases in which the court considers a party's conduct to be outside the ordinary. In reaching her decision, the judge referred to what she described as extraordinary conduct by the claimants, including weak pleadings and the late abandonment of several claims. She also noted that the Gambling Commission's own legal costs were approximately £20 million.

The competition for the fourth National Lottery licence attracted four final bidders: Allwyn, Sisal Spa, Camelot UK Lotteries and The New Lottery Company. In March 2022, Allwyn was selected as the preferred applicant, while Camelot was designated as the reserve applicant.

Camelot subsequently challenged the decision in court, automatically suspending the award of the licence. That challenge was withdrawn in September 2022, allowing the procurement process to proceed, although Camelot continued to pursue a separate damages claim.

Later that same month, the Gambling Commission formally awarded the fourth National Lottery licence to Allwyn. The licence covers a 10-year operating period beginning on 1 February 2024.

International Game Technology also sought damages relating to the competition. However, in July 2023, the High Court dismissed its claim after determining that the company lacked the necessary legal standing to bring the action.

With the Court of Appeal now refusing TNLC permission to appeal, no legal challenges to the award of the fourth National Lottery licence remain active.

The decision also means that Allwyn is now operating the National Lottery free from ongoing litigation for the first time since assuming responsibility for the licence. According to the Gambling Commission, the National Lottery has generated more than £53 billion for good causes since its launch in 1994, supporting more than 680,000 projects across the United Kingdom.

Further expanding its product offering, Allwyn launched a UK version of Powerball on 21 July under an agreement with the US Multi-State Lottery Association. The game features jackpots starting at £12 million.

By fLEXI tEAM