High Court dismisses challenge to the National Lottery procurement — key lessons & takeaways

Described by the High Court as “the most financially significant procurement process in UK history”, the decision in The New Lottery Company Ltd v The Gambling Commission was handed down in April 2026.

The dispute arose from the contested procurement process for the Fourth National Lottery licence (the Licence) and the steps taken by the Gambling Commission (the Commission) to implement that award, with the New Lottery Company Limited and Northern & Shell Plc (the Claimants) challenging both:

1. The Commission’s conduct when awarding the Licence.
2. The modifications made to the Licence following award in 2022. 
    

Here, Samantha Thompson and Michael Winder from our procurement team explore the Court’s reasoning, the key findings and what this judgment means for future procurement challenges.

Background of the case

A competitive process was run under the Concession Contracts Regulations 2016 (CCR 2016) to award a ten-year licence to operate the UK National Lottery. Four bidders reached the final stage and Allwyn Entertainment Ltd (Allwyn) was selected as the Preferred Applicant and Camelot selected as the Reserve Bidder. The Claimants ranked third after failing to meet over half of the mandatory criteria. 

The Claimants brought two claims:

1. The process claim — alleging breaches of procurement law during the competition, including manifest errors in evaluation, use of undisclosed criteria, unequal treatment and inadequate feedback.
2. The modification claim — challenging significant post-award changes to the licence and enabling agreement, with the Claimants stating such changes constituted unlawful 'substantial modifications’ under Regulation 43 of the CCR 2016. 

The Court dismissed both claims entirely 

It was found that the Claimants “failed to make out any case of manifest error on the part of the Commission in their process claim” and that the modifications “were not substantial in that they did not change the economic balance in favour of Allwyn”. The Court further stated that the Claimants failed to establish that any breach caused them to suffer a loss. Furthermore, the modifications claim was time-barred so it would’ve failed regardless. 

Key lessons for procurements 

1. Broad discretion in complex evaluations 

The Court reaffirmed that contracting authorities are granted a wide margin of discretion when evaluating bids, particularly in technically complex or high-stakes procurements. 

It’s important to note that the Court’s role in this case wasn’t to determine whether it would’ve scored bids differently but whether the Commission’s decisions were: 

1. irrational 
2. based on manifest error
3. in breach of principles of transparency, equal treatment or proportionality. 

The judgment emphasises that manifest error is a high bar to meet and to successfully challenge on that basis, the Claimants should’ve evidenced a clear and material error in the evaluation process, not simply that a plausible alternative interpretation of its bid could’ve been reached. 

2. Transparency doesn’t require exhaustive detail

The Claimants argued that they’d been failed based on undisclosed criteria, including concepts such as “unaffordable levels of play”. The Court rejected this claim and held that evaluation criteria must be sufficiently clear for the “reasonably well-informed and diligent tenderer” but it doesn’t have to spell out every consideration that may inform an evaluator’s judgement. 

3. Feedback must be meaningful — not perfect 

The Claimants’ challenge placed emphasis on the alleged inadequacies of the Phase One feedback, arguing that the Claimants weren’t warned about issues that later led to the failure of their bid. 

The Court found that first and foremost, the Commission’s feedback was in fact extensive and informative. However, feedback isn’t required to identify every weakness or potential reason for failure, particularly where a bidders own submission lacked detail. 

4. Contract modifications: context matters

In respect of the modifications claim, the Claimants argued that delays to implementing the contract, revised milestones and a potential extension to the licence fundamentally altered the contract. 

While it was held that the changes were driven by exceptional litigation risk and transition difficulties caused by earlier litigation regarding the procurement of the licence, they didn’t alter the economic balance in Allwyn’s favour. Further, such modifications wouldn’t have resulted in a different winning bidder had they been known at the start. 

The Court rejected the Claimants’ interpretation of Regulation 43 of CCR 2016, noting that contracting authorities are permitted to respond pragmatically where circumstances demand. In this case, the Court accepted that litigation risk and transition disruption were foreseeable considerations.

Key takeaways for contracting authorities & bidders

While this case relates to the previous legislation (specifically the CCR 2016), the points raised are still relevant and provide guidance for both contracting authorities and bidders alike. 

Key takeaways for contracting authorities

1. This judgment may be welcomed by contracting authorities as it supports the position that —provided a contracting authority’s approach to evaluating a tender is consistent with the published criteria, properly moderated and contemporaneously recorded — the courts will be slow to interfere. Further, authorities can be flexible in making changes post-award, providing that the changes are proportionate, justified and don’t distort competition. 
2. While providing feedback at different stages of procurement is important, it’s not necessary for such feedback to be exhaustive and/or be predictive of the final outcomes. The onus is on the bidders to utilise the feedback to strengthen bids. 
3. Clear outcome-based criteria are considered lawful and transparency doesn’t need to be overly prescriptive. 

Key takeaways for bidders

1. It’s important when participating in a tender to ensure that bidders join the dots where obligations are obvious from the overall framework proposed. The courts don’t sympathise where bidders assume that silence on a particular point equates to irrelevance. 
2. In circumstances where bidders receive comprehensive feedback from earlier phases of the process, it’s expected that bidders will use that feedback to strengthen their bids and not see it as a checklist of what will determine success or failure. 
    

Ultimately, a key feature throughout the judgment is the Court’s reliance on documentary evidence relating to moderation rationales, evaluation notes, internal risk trackers and contemporaneous emails. It was these documents that provided the Court with the evidence needed to make its judgment in favour of the Commission, demonstrating that clear records and audit trails remain one of the most effective shields against procurement challenges. 

Talk to us

Our specialist procurement team can assist you with any support you may require in respect of procurement law, including if you wish to raise a challenge — or are defending a challenge — to a procurement process. 

Talk to our procurement solicitors by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form.