The UK’s National Lottery is to be awarded to the Czech operator Allwyn and taken away from Camelot following one of the most hotly contested battles to win the license in the scheme’s 28-year history.
The Gambling Commission on Tuesday said Allwyn, which was previously known as Sazka and rebranded with an anglicised name during the process, had been designated as the “preferred applicant” to run the lottery when the current license expires in 2024.
Allwyn had pledged far higher returns to good causes as well as a cut in the price of a ticket for the National Lottery’s main draw. But the decision to award it to the Czech operator has prompted anxiety from MPs from across the political spectrum given reported links between its owner, Karel Komarek, and the Kremlin-owned energy company Gazprom.
The UK government has issued sanctions against Russian businesspeople in response to Moscow’s invasion of Ukraine, prompting widespread scrutiny of any business links to the Kremlin.
“At a time when the Putin regime is committing atrocities against the Ukrainian people, given the reported links between Allwyn and Gazprom, the government must set out that they are satisfied this company does not have links to the Russian regime,” said Alex Davies. Jones, shadow minister for tech, gambling and the digital economy.
Labor backbencher Chris Bryant described the situation as “all a bit murky”. “I just hope somebody somewhere has done proper due diligence, but I fear they won’t have done,” he said. “The government has tended to underfund that kind of research over the last 12 years.”
Former Conservative leader Sir Iain Duncan Smith said if it was proven that Allwyn does have close links to Russia, the decision may need to be “rethought”.
“It is important that if we award the lottery to a new company this needs to all be squeaky clean,” he said. “The commission needs to explain clearly why decisions were made in order to reassure people that due diligence has been taken on this.”
Komarek signed a joint venture with Gazprom in 2013 to build an underground gas storage facility in the Czech Republic.
He said at the time that the companies were planning “new joint projects, not only in the Czech Republic, but also elsewhere in Europe and in the Russian Federation”.
But in an open letter published last week, Komarek condemned the “barbarism of Vladimir Putin’s regime” and said the venture had been maintained “at the request of the Czech government, to ensure an important Czech energy asset”.
Komarek is in talks with the Czech government to nationalize the facility and remove Gazprom’s ownership, Allwyn said.
The Gambling Commission said it had “reviewed the funding structures for all applicants, including Allwyn, and is satisfied that no sanctioned entities are involved in funding the proposed licensee”.
Allwyn is Europe’s largest lottery operator with operations in the Czech Republic, Greece, Italy, Cyprus and Austria.
It is the first time since the lottery’s inception in 1994 that it will not be run by the incumbent Camelot, which has been criticized by politicians and campaigners for focusing on scratchcard games that generate less money for charities at the expense of the main draw.
Other applicants included Camelot, the Italian lottery operator Sisal and the media tycoon Richard Desmond, with the competition attracting the most ever candidates.
Camelot will be the reserve applicant if Allwyn is unable to take up the contract, the commission said on Tuesday.
“Our priority was to run a competition that would attract a strong field of candidates. Having received the most applications since 1994, it is clear that we’ve achieved just that, ”said Andrew Rhodes, the commission’s chief executive.
The National Lottery is one of the most lucrative government contracts on offer in the UK and one of the largest lotteries in the world. In the year to March 2021, Camelot made £ 8.3bn in sales and raised £ 1.9bn for charities.
The current operator, which is owned by the Ontario Teachers’ Pension Plan, a Canadian pension fund, has returned £ 45bn to good causes in the time it has run the lottery. Allwyn, in contrast, pledged in its bid to donate £ 38bn to charities in the 10 years that it will run the contract.
Camelot chief executive Nigel Railton said: “I’m incredibly disappointed by today’s announcement, but we still have a critical job to do – as our current license runs until February 2024. We’re now carefully reviewing the Gambling Commission’s evaluation before deciding on our next steps. ”
Allwyn, who had pulled together a team of City grandees and executives involved in the London 2012 Olympics to run its bid, including Sir Keith Mills and Justin King, said its selection was “a welcome signal to businesses in Europe who are considering investment in post “Brexit Britain.”