The company behind the national lottery was borrowing millions from Kremlin-owned banks when it won the UK’s largest public-sector contract, the Guardian can reveal.
Russia’s two largest lenders, VTB and Sberbank, were part of a syndicate that agreed to lend up to €640m (£545m) to Allwyn in 2020, two years before the pan-European gaming specialist was named the “preferred bidder” for the £6.5bn lottery contract.
While Allwyn repaid the portion of the loan attributable to the two Russian banks in response to the invasion of Ukraine, the funds appear to have helped support the group during the costly process of bidding for the lottery.
Loans from the Kremlin-owned Sberbank and VTB, extended via European subsidiaries in the Czech Republic and Germany respectively, remained in place for nearly a month after both lenders were placed under sanctions by the UK government.
Allwyn repaid the debts in late March 2022, after the Gambling Commission had chosen the company to run the lottery, ahead of the incumbent operator, Camelot, and a bid from the media tycoon Richard Desmond.
There is no suggestion that Allwyn, ultimately owned by the Czech billionaire Karel Komárek, was in breach of sanctions or that there was any Russian influence over the bid. There is also no evidence to indicate the Russian loans were used to finance the bid for the lottery directly.
Allwyn said it informed the Gambling Commission about the loans and its intention to repay them on 28 February, four days after VTB was placed under sanctions by the UK, and that it followed Treasury sanctions guidance.
But the loans raise questions about whether MPs were given the information they needed during select committee sessions scrutinising Komárek’s business links to Russia.
The Labour MP Clive Efford, a member of the select committee for culture, media and sport, said he could not understand why the Gambling Commission did not mention the loans during an evidence session in June 2022.
“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 that they selected it as their preferred bidder for the UK lottery,” said Efford.
“From this evidence it is clear that the Gambling Commission failed to give full and frank answers when questioned about what it knew of Allwyn’s links to Putin’s Russia.”
The committee is expected to question the Gambling Commission again in April.
The Conservative MP Iain Duncan Smith, the vice-chair of the all party parliamentary group on gambling-related harm, also questioned why the loans had not come to light previously.