I recall it being in the hotel located in North Terminal. When I first used the facility in the 90s it was the Forte Crest Gatwick Hotel, later it became a Le Meridien, and is now a Sofitel. The Hilton is in South Terminal.
Last time I used it two years ago, I overheard the lounge agent tell the person ahead of me that he was allowed to access the lounge because he was a DL PM. I would presume he was traveling on a Y ticket.