Richard Desmond and his lottery firms faces a legal bill running into tens of millions after losing a High Court claim that he was owed £1.3billion for failing to win the competition to run The National Lottery.

The billionaire demanded jackpot compensation after suing the gambling regulator. If he had won, it could have cost taxpayers hundreds of millions of pounds.

Mr Desmond - the former proprietor of titles including the Daily Express – alleged the competition process for Britain's largest public sector contract, the lottery licence, was unfair.

But delivering her ruing today, High Court judge Mrs Justice Joanna Smith said Mr Desmond's firm The New Lottery Company had 'failed to establish any aspect' of its claim, adding there was 'really no basis whatever' for it.

Since its inception in 1994, the lottery was run by Camelot. But the operator changed hands for the first time when Allwyn won the 10-year licence in 2022, and took over running the draw in 2024.

Mr Desmond and his firms, The New Lottery Company (TNLC) and Northern & Shell, came third in the bidding process.

In a High Court showdown last year, they alleged 'manifest errors' in the bidding process and demanded £1.3billion in damages for the money he says he would have made from running the draw over a decade.

In her damning ruling today, the judge said that there were 'numerous deficiencies' in TNLC's bid, which led to it 'failing over half of the different mandatory requirements' to run the competition.

She continued that there was 'really no basis whatever' for TNLC to claim that the commission had made a 'manifest error' in its decision, finding that the company 'trailed far behind Allwyn and Camelot in their scores' as part of the bidding process.

She said: 'The claimants have failed to establish that TNLC had any real chance of winning the competition.'

It is understood that legal costs in the High Court drama are around £70million, with Mr Desmond and his companies likely to be asked to foot the bill.

But Mr Desmond looked set to continue his battle. A Northern and Shell spokesperson said: 'They won. We lost. We appeal. It's not over.'

In her ruling, the judge also criticised TNLC for the 'apparently unfocused manner' in which it argued its claim that the bidding process was unfair, adding: 'The extent of this moveable feast was regrettable and, given the legal resources available to the claimants, inexcusable.'

The National Lottery, which the judge said was 'something of a national institution', was launched in 1994 and has since raised more than £50billion for good causes.

Barristers for the commission told the trial in London that TNLC failed in two important pass/fail areas in the bidding process – protecting participants' interests and financial strength.

Sarah Hannaford KC, for the body, said that had TNLC passed in those two areas, it still would not have won the bid as it scored 30 per cent lower than Allwyn, while rejecting claims that Allwyn should have been disqualified from the process over alleged regulation breaches.

The commission said today: 'The judgment gives resounding support to good causes by enabling Allwyn, with oversight from the commission, to continue with their plans of investment in the National Lottery without further distraction.'

Allwyn, which was an interested party in the case, said the ruling 'draws a line under a long-running series of allegations about the integrity of the competition process'.

It said: 'The judgment provides clarity and legal certainty, and our focus now is on delivering for players and increasing funding for good causes.'

The decision comes days after Allwyn announced its 'biggest ever' change to its main Lotto draw, alongside a new UK version of Powerball, which was previously only available in the US and will be the country's first '£1 billion-plus mega-jackpot game'.