Allwyn, the powerhouse behind the UK’s most substantial public-sector contract, has reportedly secured millions from Russia’s leading lenders, VTB and Sberbank, as per an exposé by The Guardian. Although no sanctions were breached, such revelations prompt questions about transparency within the gambling sector and might challenge the credibility of the UKGC.
Allwyn Asserts That It Abided by Sanctions
The Guardian’s disclosure suggests that Allwyn procured up to £545 million ($695 million) in 2020, a couple of years prior to its recognition as the “preferred bidder” for the £6.5 billion ($8.3 billion) lottery contract. Allwyn paid back the loans owing to the two Russian banks post Russian invasion of Ukraine, seemingly these funds bolstered the consortium during its lottery bid.
There are no indications that Allwyn violated sanctions or had any Russian sway over its bid. Yet, the loans from the Russian government-owned Sberbank and VTB remained active for almost a month subsequent to both banks being sanctioned by the UK government. Allwyn reimbursed the debts in late March 2022 after being selected by the Gambling Commission to administer the lottery.
Allwyn has consistently voiced its revulsion at Russia’s intrusion. We always were – and still are – convinced that no penalised entities are involved in financing Allwyn.
Allwyn statement
The company announced that it had informed the Gambling Commission about the loans and its plan to repay them on 28th February, conforming to Treasury sanctions guidelines. A spokesperson for Allwyn maintained that the firm commenced the repayment process immediately after Russia invaded Ukraine, and prior to its appointment by the Gambling Commission as their selected contender.
Inadequate Transparency Could Have Influenced Selection Outcomes
Notwithstanding the company’s swift measures, this disclosure incites queries about whether MPs received sufficient information during select committee meetings scrutinising Allwyn’s business ties to Russia. Conservative MP Iain Duncan Smith also interrogated why information regarding the loans had previously been undisclosed, underscoring the requirement for transparency in public sector contracts of such magnitude and relevance.
Labour MP Clive Efford also lambasted the Gambling Commission, asserting that the operator kept the loans hidden during a testimony session in June 2022. The resonance of this controversy at both political extremes underlines its importance, potentially impacting UK’s progressing white paper gambling reform consultations.
It’s appalling that the commission chose to keep us in the dark about its knowledge of Allwyn’s loans from two banks linked to the Russian state when it identified it as their preferred bidder for the UK lottery.
Clive Efford, Labour MP
This exposure casts a spotlight on the nuances and disputes intrinsic to the UK’s lottery tender process, leading to apprehensions about transparency and scrutiny in the attribution of public contracts. While Allwyn seems to have adhered to sanctions, these disclosures could lend fuel to past litigations against the UKGC by failed bidders like Camelot and IGT, alleging an unfair selection process.
