Desmond still fighting
Billionaire ex-porn baron Richard Desmond has taken his beef with the UK’s gambling regulator to another level after drawing long-established investment bank NM Rothschild into the legal conflict.
prickly thorn in the body’s side
While multiple parties have unsuccessfully filed suits against the UK Gambling Commission over its awarding of the National Lottery contract to Czech firm Allwyn Entertainment, Desmond remains a prickly thorn in the body’s side.
In his latest legal action, the media kingpin’s firm Northern & Shell has alleged the UKGC failed to execute due diligence on a conflict of interest involving Rothschild.
Northern & Shell has requested the High Court in London to demand that Rothschild hand over related documents as part of its suit against the UKGC.
Desmond using his influence
Desmond’s firm wants the High Court to declare the UKGC’s lottery contract process unlawful, and is seeking damages in the case that is expected to head to trial later in 2025.
Northern & Shell claims Rothschild, who advised the UKGC on the lottery tender process, had a prior conflict of interest with Allwyn.
According to the Financial Times, Rothschild is not party to Northern & Shell’s ongoing battle against the UKGC. Desmond, however, holds significant sway over the UK government’s executive agency of the Department for Business and Trade, Companies House, and has made Rothschild’s role part of his suit against the regulator.
Northern & Shell’s lawyer Daniel Toledano KC stated in written arguments for a hearing that the UKGC “did not adequately investigate a conflict of interest, or apparent conflict of interest, in respect of its use of Rothschild.”
Toledano argued that the bank possessed sensitive information during the UK lottery tender, including “all sections of every applicant’s application.”
bank invested in a bond issued by Allwyn
The bone of contention is that Allwyn paid Rothschild a discretionary fee for advising on an investment with Greece’s lottery operator in 2019, and that a subsidiary fund managed by the bank invested in a bond issued by Allwyn before the firm rebranded.
Desmond’s firm wants Rothschild to disclose documents, “including internal correspondence and details of the bond investment.”
Counter arguments
According to the FT, Rothschild’s attorney Valentina Sloane KC told the hearing that Northern & Shell’s disclosure application was “exceptional and intrusive” and was irrelevant to Desmond’s case against the UKGC.
Allwyn’s lawyer Mark Howard KC urged the London High Court to refuse the disclosure application, branding Northern & Shell’s demand for documents a “fishing expedition.”
The UKGC, meanwhile, stated it does not comment “on ongoing legal proceedings.”
The regulator must be sweating nevertheless, with its competence also called into question last month after news it mistakenly sent over 4,000 sensitive documents relating to the lottery lawsuit to Desmond’s legal team.
