The newly-selected UK National Lottery licence holder has warned that sanctions associated with the ongoing Russian invasion of Ukraine could have a negative effect on the business.
The Czech Republic-based Allwyn Entertainment, which is currently the largest lottery operator in Europe, was recently announced by the UK Gambling Commission (UKGC) as the regulator’s preferred choice for the holder of the National Lottery operating permit for the next 10 years. However, the military conflict in Ukraine has raised certain questions over the alleged links of Allwyn’s sister company to the Russian gas giant Gazprom.
As previously reported by Casino Guardian, the UKGC has been criticised for choosing Allwyn, which is associated with Karel Komarek, a billionaire investor originating from the Czech Republic. The billionaire investor, however, has been linked to Gazprom through Moravske Naftove Doly (MND) – another company owned by Mr Komarek, which in 2016 held a stake in the Russian energy giant – which has led to questions over the operator’s suitability to run the UK National Lottery.
Although Mr Komarek could be expected to get a payday worth over £570 million at the time he lists Allwyn on the New York Stock Exchange (NYSE) through a special purpose acquisition company also known as SPAC, a recent investor presentation for the operator has warned that the ongoing military conflict between Russia and Ukraine, and the sanctions related to it could have a negative impact on Allwyn’s business performance.
Allwyn’s Links to Russian Energy Giant Gazprom Raise Questions in UK Parliament
The Czech Republic-based gambling and lottery operator listed the Russian invasion of Ukraine among a number of risk factors that could seriously affect its operations and had caused turbulence in the market and the economic conditions. The operator further noted that the ongoing war is also expected to have some additional consequences globally.
As explained by a spokesperson for Allwyn, the potential effect of the sanctions could be considered a standard risk factor that affects literally every US-listed company that operates in a number of jurisdictions. The spokesperson described the sanctions as a reflection of the existing global climate, along with the possible impacts of the coronavirus pandemic, and noted these factors are not an indication of any specific threat to the operations of Allwyn.
Recently, Allwyn emerged as the chosen competitor for the fourth National Lottery operating licence. The company, which was previously known as Sazka Group, currently operates lotteries in Australia, Greece and Italy. The inception of the operating permit by its new holder, however, could stall, because the incumbent National Lottery licence holder, Camelot, is taking the UK gambling regulator to court over its decision to strip it of the licence it has been holding since the establishment of the National Lottery.
As reported earlier, questions regarding Allwyn’s operations have also been raised in Parliament because of the company’s links to Gazprom, with Members of Parliament of the Labour Party asking the Government what checks have been in place to make sure that the operator has no political or financial ties to the regime of President Vladimir Putin in the Russian Federation.
According to the country’s shadow culture secretary Alex Davies-Jones, the minister should be able to confirm his confidence that the new National Lottery provider had no links to Russia and the political regime there, considering the extremely serious situation in Ukraine. The Minister of the Department for Digital, Culture, Media and Sport (DCMS), Chris Philp, noted that it is the UK Gambling Commission that has the statutory obligation to check whether all requirements in the application process are met by the candidates. He also explained that the gambling watchdog has given him assurances that the Czech gambling and lottery group met all the requirements and added that a security vetting process was underway.
- Author
Olivia Cole
