Who Are Allwyn & Sazka, The New UK Lottery Operator?

lottery balls partyWhile much has been spoken of regarding the UK gambling scene as of late, one of the biggest stories to break has been regarding the new licence being awarded for The National Lottery. That licence, which has been clung onto by Camelot ever since the lottery first came into action in 1994, has officially been awarded to the Czech operator known as Allwyn, following a hotly contested battle between various big-name bidders.

Allwyn, which previously went by the name of Sazka, was chosen by the UK Gambling Commission (UKGC) as its preferred applicant to take over control of the country’s lottery when Camelot’s licence comes to an end in 2024. The Allwyn company had pledged to reduce the price of lottery tickets whilst stating it will ensure higher returns are given over to good causes across the United Kingdom. Despite this, the decision by the UKGC to provide the licence to the Czech operator has drawn criticism and anxiety from some Members of Parliament, considering the links that Allwyn’s owner, Karel Komarek has with Gazprom, a Krelim-owned energy company.

But exactly who is Allwyn and Sazka? What are the company’s origins and how did it come to be what it is today? If you’re interested in finding out more about the UK’s new lottery operator, then join us for a run-down on everything that is associated with it.

Allwyn Signifies International Expansion of Sazka Company

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If Allwyn isn’t a company that you have heard of before, this is because it has only been functional under this name since December 2021. Prior to that time, it went by the name of Sazka Entertainment, and served as the Czech operator for national lottery games, instant lotteries and online lotteries. The rebranding of the company was suggested in April of that year, which was when the brand created its Allwyn UK subsidiary, which would be used to put forward its bid for control of The National Lottery licence.

Yet under its former name, the company had been providing its services for many years. Sazka Entertainment became the incumbent Czech lottery operator in 2011, and one year later, KKCG – a private investment group founded and owned by Czech businessman Karel Komárek – became the sole owner of Sazka. In 2015, KKCG united with EMMA Capital – a Czech investment management company – to acquire an 11.3% shareholding in Austria’s largest gaming and lottery company, CASAG.

One year later, and KKCG merged with EMMA Capital to become the Sazka Group, before acquiring a 32.5% stake in Lotto Italia, which occurred via a joint venture with incumbent operator Lottomatica. Further shares in CASAG were acquired in 2017 by Sazka Group, increasing its indirect stake to 34%, while in 2018 the company acquired a 67% share of SuperSport. KKCG became the sole owner of Sazka Group in 2019 by acquiring EMMA Capital’s interest, before its shareholding in CASAG increased to 55.5% in 2020.

It was in 2021 that Sazka Entertainment AG became the sole shareholder of Sazka Group, serving as a 100% subsidiary of KKCG. Allwyn then made its emergence as the new brand of Sazka Entertainment AG, serving as the parent company of Sazka Group.

That name change came into effect for good in December of last year, with Allwyn being a much more international brand. In doing so, Sazka Entertainment has put itself on the map as being more than a small European company and instead can be seen as a major international lottery operator.

The company continued to grow its business from headquarters which remain inside the Czech Republic. A huge $566 million in funding was handed over to Allwyn from Apollo Global earlier on in the year, and this is helping with the expansion of the business even more. Allwyn currently has lottery operations in Austria, Cyprus, Greece, Italy and its native homeland of Czechia.

How Did Allwyn Secure the UK Lottery Licence?

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While various companies put themselves forward for the acquisition of the UK lottery licence, including current operator Camelot, it was Allwyn who made all the right moves, it seems. Other bidders for the licence included Italian lottery operator Sisal, which entered into a partnership with BT as well as children’s charity Barnardo’s, and owner of the UK Health Lottery, Richard Desmond.

One of the biggest coups that aided Allwyn was the addition of Lord Sebastian Coe to its board. This occurred in September of 2021, prior to the company’s name change. Coe, who is the president of World Athletics and chaired the London 2012 Olympics committee, united with the Sazka board as its first independent non-executive director. Speaking on his appointment to the position, he said: “I am a great believer in lotteries and the sizeable different they make to people’s lives across the arts, sport and heritage”. Yet he made sure to mention that he would not have any involvement in country-specific operations or the bid to run national lottery businesses within.

Komarek spoke of Coe as bringing “tremendous additional strength” to the company’s international perspective. Yet he isn’t the only British corporate name to have joined with Sazka/Allwyn. Justin King, who is known to many as the former chief executive of supermarket Sainsbury’s, was included as an advisor to the board in January of 2021, while the inventor of Air Miles and Nectar Points, Sir Keith Mills, was given the position of bid chairman in November of the previous year.

Doubtless, the fact that these big names had chosen to ally with Allwyn helped the company’s bid for the lottery licence. Yet it was also the fact that the company pledged to do more for good causes across the country, which had been under heavy criticism and speculation, especially following the increase in lottery ticket prices under current operator Camelot.

“With the Gambling Commission having put its trust in us, we can immediately start to enact out exciting plans to deliver The National Lottery back to the heart of our country”, said Mills upon the announcement of Allwyn’s successful bid. “We will do this by rekindling the meaning The National Lottery has for each of us, whether as individuals or as part of the communities we live in”, he continued.

And the success of Allwyn in its bid to acquire the licence for the lottery was backed up by the CEO of the UKGC, Andrew Rhodes. He stated that he is “confident” that the choice to select Allwyn as the recipient of the fourth UK lottery licence will be a successful one of the highest standard. A decision “that maximises returns to good causes, promotes innovation, delivers against our statutory duties, and which ultimately protects the unique status of The National Lottery”, he said.

Camelot, meanwhile, remains as the “reserve applicant”, which means it will secure the licence if Allwyn backs out or is not able to take up the position of operator. Despite this status, CEO of Camelot, Nigel Railton, said that he was “incredibly disappointed” with the outcome of the vote.

Fears Over Links to Krelim-Owned Energy Company

russian flag flying sky backgroundIssues arose swiftly once Allwyn was awarded the new licence to the lottery, though. Owner of the company, Komárek, was noted to have certain links with a Russian energy group known as Gazprom via his company Moravske Naftove Doly (MND). Through that brand, he formed a joint venture with Gazprom, so as to build an underground gas storage facility in the Czech Republic, and this opened up in Moravia in 2016.

Of course, the recent Russian invasion of the Ukraine has led to massive sanctions being imposed on President Putin and other billionaires and companies in Russia. But Komárek himself has condemned Russia’s invasion of neighbouring Ukraine, calling it a “senseless act of aggression”. Furthermore, he was said to be seeking to sever his ties with the Gazprom company in March, as a result of that invasion. This would also free Czechia of any ties with the Russian brand.

“…we are doing all we can to support the brave Ukrainians impacted by the barbarism of Vladimir Putin’s regime”, said Komárek when asked about MND’s involvement with Gazprom. “There are very few options to fully divest from Russian gas in Eastern Europe”, he continued. “What we want to do is free ourselves from Russian involvement without putting ordinary Czech citizens at risk, in the middle of winter.”

He did also make it known that he himself had divested from Russian assets many years prior, with the only exceptions being the joint venture between Gazprom and MND and a shareholding in a gas terminal, which he has been trying to exit for a number of years already.

Yet this didn’t stop the anxious comments of various MPs. Labour backer Chris Bryant described the scenario as being “a bit murky” and said that he had high hopes that someone has “done proper due diligence” but had fears this wouldn’t be the case. “The government has tended to underfund that kind of research over the last 12 years”, he finished.

Meanwhile, former leader of the Conservative party Sir Iain Duncan Smith said that if it came to light that Allwyn does indeed have close links to Russia, then the decision over their reception of the lottery licence should be rethought. “It is important that if we award the lottery to a new company this needs to all be squeaky clean”, he commented.

Camelot Poised To Win But Failed In A Few Areas

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Camelot, the current lottery operator, has held onto the licence for its first three terms, and 2024 will mark the first time that another brand has controlled The National Lottery. Yet the competition process that the UKGC set up to determine the new licensee is highly secretive, shrouded in its own mystery. Bidders were marked on various categories, such as the technology in use and the planned returns to good causes, but code names were utilised on the scorecards, rather than the real names of the companies competing.

Yet it is understood that Allwyn’s pitch outdid Camelot’s in two key areas, those being the promise of the higher return to good causes as well as strengthened efforts to tackle gambling addiction in the United Kingdom.

Camelot came under a lot of pressure in recent years, following the revelation that profits rose faster than the returns to good causes. This prompted quite the criticism and disapproval by the National Audit Office in 2017. Despite this, Camelot claims that it has led a return of £45 billion to 660,000 good causes across the country over its 28 years of operating the lottery. It also stresses that its own profits amount to around £95 million or 1% of ticket sales. A recent uptick in donations to good causes was also noted by the company.

However, it us understood that Allwyn pledged to do much better than that for The National Lottery. It said that over the course of its first 10-year licence, it would pledge more than £30 billion to good causes across the UK. It said it would do this by recapturing the long-lost glitz of the original weekly draw that drew so many people in to playing the lottery. Additionally, it stated that it will offer more super-national lottery, similar to the popular EuroMillions draw, citing that larger jackpots tend to pull in greater numbers of players. Alongside this, it intends to introduce new technology as a way of appealing to the younger audience, which has drifted away from playing lottery games in favour of online casino games and sports betting options.

That technology offering will be provided as part of a partnership with well-known brand Vodafone, which will also be incorporated into shops. This will allow players to use their phone as a way of accessing products like scratchcards while in a store. This gives high street stores providing lottery products the chance to share in the spoils, instead of losing out to online sales.

And because Camelot looked to mimic online casinos by providing instant win games via the internet, further criticism was directed at the operator. Because Allwyn placed responsible gambling at the forefront of its own pitch, this is said to have led the UKGC towards selecting it as the prime candidate for the lottery licence.