The Competition Appeal Tribunal has dismissed a legal challenge accusing the Gambling Commission of unlawfully allowing Camelot to retain £70.2m of National Lottery revenue for marketing.
The challenge was brought by the New Lottery Company, Northern & Shell, and Health Lottery Elm, companies owned by Richard Desmond, who argued the approval amounted to an unlawful subsidy under the Subsidy Control Act 2022 and gave Camelot an unfair economic advantage.
The joint marketing investment authorised £70.2m of revenue generated by ticket sales to be retained and reinvested for the purpose of marketing the National Lottery during the final year of the third National Lottery licence, in a bid to increase net returns and benefit good causes.
During the case, heard in December, the applicants argued the Gambling Commission had effectively authorised a subsidy to Camelot as operator of the third National Lottery licence, conferring an economic advantage on Camelot and later Allwyn, which assumed control of the National Lottery in February 2024 after acquiring Camelot the previous year.
In response, the Gambling Commission said the investment did not amount to a subsidy and no economic advantage was conferred since the decision “pursued an inherently commercial objective”.
In its judgement, the Tribunal dismissed the applicants’ concerns over the econometric analysis, saying their modelling argument was “hopeless”.
“Against that background, the applicants’ challenge to the decision based on the adequacy of the econometric modelling is hopeless,” it said.
The Tribunal also added: “In summary, the applicants’ submissions were little more than speculation. That seems to us to fall considerably short of the hurdle that the case law sets for the application of the commercial market operator principle.”
“We are delighted with the Tribunal’s judgement in what is only the third subsidy control challenge brought under the Subsidy Control Act 2022,” said Samantha Ward, partner at Clifford Chance advising Camelot and Allywn.
“The Tribunal has confirmed no subsidy was provided by the Gambling Commission to our clients Camelot or Allwyn. The judgement provides important guidance on the application of the ‘commercial market operator principle’ under the Subsidy Control Act, particularly in circumstances where no actual market comparator exists, and also reiterates the critical importance of bringing subsidy control challenges promptly after becoming aware of the decision being challenged.”
The dismissal of the case comes as Desmond’s companies Northern & Shell and the New Lottery Company continue in their main legal battle against the Gambling Commission for its decision to grant Allwyn the licence to run the National Lottery, alleging the process was unfair.
The trial began in October 2025 with the judgement due to be announced in the coming weeks.
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