New National Lottery operator warns Russian sanctions could hit business
Allwyn’s parent company has links to Russian gas giant Gazprom, which has led to questions over its suitability being raised in Parliament.
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Your support makes all the difference.The UK’s next National Lottery operator has admitted sanctions associated with the Russian invasion of Ukraine could affect the business.
Allwyn Entertainment won the contract to run the UK National Lottery from 2024 but questions have been raised over its sister company’s links to Russian gas giant Gazprom.
The founder, Czech billionaire Karel Komarek, could be in line for a 750 million dollar (£572 million) pay day when he lists Allwyn on the New York Stock Exchange through a special purpose acquisition company (spac).
But an investor presentation for Allwyn, seen by the PA news agency, warns: “The conflict between Russia and Ukraine, and related sanctions could negatively impact us.”
It also lists under “risk factors” that the conflict could adversely affect operations and has caused “unstable market and economic conditions and is expected to have additional global consequences”.
A spac is a new form of listing on stock markets where a cash shell is launched to raise money from investors with the promise of buying new assets down the line.
They are cheaper to launch than a traditional stock market listing and a quicker way of raising money but carry greater risks.
A spokesman for Allwyn said: “The potential impact of sanctions is a standard risk factor that virtually every US listed company with international operations is making in light of the invasion of Ukraine by Russia.
“As is self-evident to any fair-minded person who reads it, the inclusion of sanctions as a risk factor in our New York Stock Exchange listing presentation is a reflection of the current global climate, akin to the possible impacts of Covid-19, not an indication of a specific threat to Allwyn.”
Allwyn won the contract for the National Lottery from previous operator Camelot earlier this year after the Gambling Commission awarded a five-year licence to the firm.
The company, previously known as Sazka, runs lotteries in Austria, Italy and Greece, and proposes to cut the cost of UK tickets from £2 to £1.
But the deal could stall, as Camelot is taking the Gambling Commission to court to challenge the decision to strip it of the licence after 25 years.
Questions of Allwyn have also been raised in Parliament, with Labour MPs asking the Government what checks have been made to ensure it does not have financial or political ties to the Putin regime.
Shadow culture secretary Alex Davies-Jones asked in the House of Commons last month: “There have been clear concerns raised around the Gambling Commission’s decision to appoint the new licence to a company with reported links to Gazprom.
“Given the extremely concerning situation in Ukraine, can the minister confirm he is confident that the new provider has no links to the Russian regime, and if so – why?”
Minister Chris Philp, at the Department for Digital, Culture, Media and Sport (DCMS), said: “The Gambling Commission, as part of their licence award process, have a statutory obligation to make sure that anyone given a licence meets the fit and proper person test.”
He added that the Gambling Commission has given him assurances that Allwyn does pass the test and that a security vetting process is under way.
Mr Komarek made much of his fortune from investments in oil and gas after the end of the Cold War but last month he started to cut links to Gazprom.
Allwyn’s sister company MND runs a gas storage venture with Gazprom in the Czech Republic but is looking at ways to end the Russian firm’s involvement. The billionaire also condemned the Russian invasion of Ukraine last month.
The company’s successful bid for the National Lottery was led by Sir Keith Mills, chief executive of the London 2012 Olympics and former Sainsbury’s boss Justin King. Lord Seb Coe is expected to serve on Allwyn’s board.