UK Government Investigates Ties between Allwyn and Kremlin-Owned Banks

Allwyn, the company behind the UK’s largest public-sector contract, allegedly borrowed millions from Russia’s two largest lenders, VTB and Sberbank, according to a revelation by The Guardian. While the company did not violate sanctions, this newest controversy raises concerns regarding the gambling sector’s transparency and may undermine the UKGC’s position.

Allwyn Claims It Complied with Sanctions

According to The Guardian’s report, Allwyn borrowed up to £545 million ($695 million) in 2020, two years before the operator was named the “preferred bidder” for the £6.5 billion ($8.3 billion) lottery contract. While Allwyn repaid the loan attributable to the two Russian banks after the invasion of Ukraine, the funds seemingly supported the group during its lottery bidding process.

There is no suggestion of Allwyn being in breach of sanctions or of any Russian influence over the bid. However, loans from the Kremlin-owned Sberbank and VTB remained in place for nearly a month after both lenders faced sanctions by the UK government. Allwyn repaid the debts in late March 2022 after being chosen by the Gambling Commission to run the lottery.

Allwyn has repeatedly expressed its horror at Russia’s invasion. We were – and still are – satisfied that no sanctioned entities are involved in funding Allwyn.

Allwyn statement

The operator said it informed the Gambling Commission about the loans and its intention to repay them on 28 February, complying with Treasury sanctions guidance. An Allwyn spokesperson stated that the company initiated the repayment process promptly after Russia invaded Ukraine and before being named by the Gambling Commission as the preferred applicant.

Lacking Transparency Could Have Skewed Selection Results

Despite the company’s prompt actions, this revelation raises questions about whether MPs received adequate information during select committee sessions scrutinizing Allwyn’s business links to Russia. Conservative MP Iain Duncan Smith also questioned why the loans had not come to light previously, emphasizing the need for transparency in public sector contracts of such value and importance.

Labour MP Clive Efford also criticized the Gambling Commission, stating the operator did not disclose the loans during an evidence session in June 2022. The fact that this controversy reverberated across both ends of the political spectrum highlights its significance, as ongoing discussions could impact the UK’s ongoing white paper gambling reforms.

It is unacceptable that the commission chose not to inform us that it knew Allwyn had loans from two banks linked to the Russian state at the time they selected it as their preferred bidder for the UK lottery.

Clive Efford, Labour MP

The revelation sheds light on the intricacies and controversies surrounding the UK’s lottery bidding process, raising concerns about transparency and oversight in awarding public contracts. While Allwyn appears to have complied with sanctions, these revelations could lend credence to past lawsuits against the UKGC by losing bidders like Camelot and IGT, claiming that the selection process was unfair.