Gazprom to cut ties with UK lottery operator’s owner

By the end of the month, the billionaire owner Allwyn, which runs the UK national lottery, will cut his last ties to Russia’s state owned energy company Gazprom, two years after he won the UK’s biggest public sector contract.

Since taking over the lottery licence from Camelot for a 10-year period in 2022, the Czech tycoon Karel Komarek has been scrutinized because of his links with Russia.

The MPs’ questions have mainly focused on KKCG’s Czech company MND. MND owns Moravia Gas Storage, which houses the Damborice underground storage facility in Czech Republic.

MGS had a 50/50 joint venture with Gazprom until earlier this year. This is a state-owned and controlled company. Gazprom’s UK operations are not sanctioned, but some of its executives may be.

The Gambling Commission told the Culture, Media and Sport Select Committee that in June 2022, after the full-scale invasion and the Allwyn lottery contract had been awarded to Allwyn, they were expecting an announcement about the plans to end the Gazprom partnership “within days”.

MND, however, was not able to implement a plan for diluting the stake of Russian Energy Company by issuing additional shares until March of this year.

Gazprom still retained less than 3% of the shares even after dilution.

MND is now set to purchase the remaining 2,63% of Gazprom shares in the gas plant. The deal has already been approved and should be completed by the end June.

Iain Duncan Smith is the former Conservative leader and chair of a parliamentary cross-party group that examines the gambling industry. He said it was difficult for MPs to get information from the Gambling Commission about Allwyn’s Russian connections.

It is deeply worrying that it was so difficult to get information on one of the UK’s largest contracts in the public sector.

Komarek publicly denounced Vladimir Putin following the invasion of Ukraine. In an open letter, published in March 2022 at the time when the Gaming Commission prepared to make a decision on whether or not to grant Allwyn the 10-year license to operate the lottery, Komarek described the war as brutal.

Komarek has struggled to dispel concerns over business ties with Russia due to the persistent link to Gazprom.

A spokesperson from KKCG stated that it was “pleased” to confirm that MND, its subsidiary, will purchase the remaining 3% shares in Moravia Gas Storage MGS (MGS), which were previously owned by Gazprom. MND, following a decision made at the MGS General Meeting, will become a 100% shareholder in MGS before the end of 2024.

The 50/50 MGS Joint Venture was formed in 2013. “The 50/50 MGS joint venture was established in 2013.

This has been achieved following a number necessary legal and regulatory procedures.

It was revealed earlier this year that Allwyn, the parent company, was borrowing millions of state-owned banks VTB, and Sberbank, at the time when it won the UK Lottery contract. However, there was no evidence that the loans were used directly to fund the lottery bid.

The Gambling Commission previously stated that it had vetted each applicant for the National Lottery licence using the UK Security Vetting Service of the UK government.

The regulator was satisfied with the fact that Allwyn did not do business with sanctioned entities, and that Russian interests in the lottery had no influence.