A High Court judge slammed the lawsuit Northern & Shell filed against the Gambling Commission as “unreasonable,” paving the way for a bill exceeding £40mn. The case stemmed from the publisher’s challenge to the regulator’s decision to block a proposed lottery, a move the court deemed without merit.

The judgment orders the media group to shoulder the regulator’s costs and damages, a financial hit that could pressure its already strained cash flow. Northern & Shell, owned by Richard Desmond, has faced a series of regulatory setbacks, and the added liability may force asset sales or tighter credit lines.

Industry observers note that the ruling sends a warning to other firms considering aggressive legal tactics against UK regulators. The Gambling Commission’s victory reinforces its authority to enforce licensing decisions without fear of costly protracted litigation.

Investors will watch Desmond’s balance sheet closely as the £40mn-plus exposure reduces earnings outlook for the next fiscal year. The immediate impact is a downgrade in the group’s credit profile and heightened scrutiny from lenders.