MPs have demanded assurances from the gambling regulator about the new national lottery operator, Allwyn, raising concerns about its commitments to safer gambling and donations to good causes, as well as its ownership structure.
The Gambling Commission said in March 2022 that it had decided to award Allwyn the lucrative 10-year licence to run the lottery, estimated to be worth up to £100bn in sales.
The decision, which was officially confirmed six months later, followed a bitter three-way bidding war between Allwyn, the media tycoon Richard Desmond, and Camelot, the holder of every licence since weekly draws began in 1994.
In a letter to the Gambling Commission, seen by the Guardian, the all-party parliamentary group (APPG) on gambling-related harm called for an update on how the regulator would hold Allwyn to promises it made when trying to win the contract.
During the lengthy competition process, Allwyn pledged to more than double the amount that its predecessor, Camelot, had raised for good causes over the course of the licence, from £17.9bn to £38bn.
Chief executive Robert Chvátal has since said that the company “may get a headwind initially” that will lead to a shortfall in its targeted increase at first. Allwyn insists it will still hit the £38bn target over the course of the licence.
The APPG asked the regulator to explain “what action is being taken to ensure that returns to good causes are prioritised and increased under the new contract.”
The group, led by Labour’s Carolyn Harris and former Conservative party leader Iain Duncan Smith, also voiced concern about Allwyn’s recent acquisition of a 70% stake in online gambling content developer Instant Win Gaming (IWG).
IWG makes gambling content with titles such as Vegas Dice and Fast Buck Lucky, “instant win” games that have been linked by studies to higher rates of problem gambling than weekly lottery draws.
The group asked how the regulator would ensure “that social responsibility is kept at the heart of the lottery as Allwyn diversifies into areas that are associated with higher level of gambling related harm”.
Allwyn has also faced questions about business ties between its ultimate owner, the Czech billionaire Karel Komárek, and Russia.
Komárek has publicly condemned Vladimir Putin’s “brutal” invasion of Ukraine.
But when Allwyn officially took over the licence on 1 February 2024, the Guardian revealed that Komárek’s holding company, KKCG, was still in business with the Kremlin-owned gas company Gazprom, nearly two years after promising regulators he would sever ties with Russia.
KKCG is a co-investor in a Czech gas storage facility with Gazprom and has been trying to unravel the partnership since the start of the Ukraine war.
On Friday, KKCG confirmed that the dilution of the Russian firm’s stake to below 3% had received court approval. KKCG is now expected to pursue a second transaction to remove Gazprom from the venture altogether by the end of the year.
The Gambling Commission has previously come under scrutiny from MPs on the culture select committee over what it knew about Komárek’s Russian business links when it named Allwyn as the preferred bidder for the lottery licence in March 2022.
The APPG asked the Gambling Commission for “further information on the thorough checks that the Commission has undertaken and will continue to, regarding Allwyn’s ownership and that of its affiliates”.
Allwyn said it was “committed to modernising and safely growing The national lottery over the next 10 years, with draw-based games like Lotto at the heart of our strategy.
“Today, the national lottery generates £30m each week of funding for good cause projects; our aim is to double that to £60m each week by the end of the licence.”
The Gambling Commission said it had taken steps to establish that Allwyn was not funded by any sanctioned entities. It said money for good causes was still projected to increase in line with Allwyn’s predictions, adding that Allwyn was also bound by requirements to comply with player protection strategies to limit gambling harms.
