Sazka’s Lottery Advisor Draws Criticism

European lottery operator Sazka has been criticized over its choice of advisor for its upcoming National Lottery bid. Flint Global, one of the firms that Sazka has hired, employs former chief of the DCMS Dame Sue Owen. This could be viewed as a conflict of interest, although Flint Global has maintained that Owen has not been involved in the firm’s dealings with Sazka.

Numbered lottery balls on a blue background.

If Sazka’s bid for the National Lottery is successful, it would be first competitor to beat Camelot, which has run the lottery since its launch in 1994. ©ChiniGaray/Pixabay

Flint Global Has DCMS Connections

Czech gaming firm, Sazka, has drawn scrutiny after hiring London based public affairs consultancy Flint Global to act as an advisor in its upcoming bid to operate the National Lottery. The lottery license is up for renewal, and interested parties are now preparing their bids to take over from Camelot as operator in 2023.

Flint Global was co-founded by Sir Simon Fraser, former head of the Foreign Office, alongside his business partner Ed Richards, former CEO of regulator Ofcom. Flint Global is a public affairs group that assists companies with navigating regulatory, policy and political changes.

Sky News has drawn attention to a potential conflict of interest in Dame Sue Owen, one of Flint Global’s senior employees. Before joining Flint Global as a part-time specialist advisor four months ago, Owen spent over five years at the DCMS as permanent secretary, leaving the role in March.

The DCMS is overseeing the bidding process for the fourth National Lottery license. The National Lottery tender process has been delayed, due to the coronavirus pandemic, and is expected to be launched this coming autumn.

Sazka has confirmed that it has hired Flint Global as one of its advisors for its National Lottery bid. According to Flint Global, the signing of the contract with Sazka predates Owen’s appointment at the company. It also maintained that she had not had any contact with Sazka.

However, Sky News has drawn attention to a letter published by Whitehall’s Advisory Committee on Business Appointments in April. For two years after leaving the civil service it states that Owen:

“should not advise, or undertake any work for any company or organisation, with regard to any policy, regulation or other measure falling within the scope of DCMS’s responsibilities which was considered, formulated or introduced during her time in office as permanent secretary at DCMS.”

For this reason, Flint Global says that it consciously made the decision not to let her work on the Sazkza Group account, as it would breach these ACOBA conditions. Flint Global has courted controversy before, with clients such as Huawei Technologies, which was banned in July from the development of the UK’s 5G network.

If Sazka does go forward with its prospective lottery bid, it is likely to be competing with Camelot, the long-time operator of the National Lottery, and publishing mogul Richard Desmond. Provided there are no further delays triggered by the pandemic, the winner will be announced next year.

Sazka has not committed fully to entering a bid for the lottery yet. It says that it has been in touch with the Gambling Commission while it comes to a decision, and has been working with a number of advisors. A spokesman for Sazka told Sky News:

“As the leading operator of lotteries in Europe, Sazka could offer the expertise and resources required to deliver a state-of-the-art operation alongside some fresh thinking that would boost the National Lottery’s appeal among the public over the next decade to secure more money for good causes.”

Competition From Camelot and Richard Desmond

Sazka has been rumored to be a contender since the beginning of the year, when it was reported that Czech business mogul Karel Komarek, who owns Sazka, had expressed an interest in submitting a bid for the National Lottery. Komarek founded the Sazka Group in 2016, and is now the largest lottery owner in Europe. Komarek is worth an estimated $3.8 billion, and is 648th on the Forbes ‘World’s Billionaires List’.

Sazka is likely to face stiff competition from Camelot, which has run the National Lottery since it was first launched in 1994. Since then, it has warded off all other bidders, and is now drawing to the end of its third license period. Since 2010, the Camelot Group has been owned by the Ontario Teachers’ Pension Plan.

Camelot has faced scrutiny in recent years, from MPs who say that it has been funneling its profits away from UK charities. According to figures from the National Audit Office, Camelot’s profits increased by 122% in seven years. Meanwhile, from April 2016 to April 2017, its income for good causes fell by 15%.

Another likely contender is Richard Desmond, famously a former pornographer and the founder of Northern & Shell, a British publishing group. Desmond is no stranger to the lottery either, having run the Health Lottery since its creation in 2011. Roughly 20% of the Health Lottery’s turnover goes to charitable causes.

Sir Richard Branson has been a regular bidder for the National Lottery, competing for the license at every given opportunity. He was expected to compete again this year, and reports claimed that he was in the process of preparing a bid. However, in May, Branson withdrew his interest, in order to focus on his Virgin business empire.

Branson’s airline, Virgin Atlantic, fell into financial trouble during the coronavirus pandemic. The multi-billionaire was slated when he asked the airline’s staff of 8,500 to take eight weeks of unpaid leave. Branson then asked the UK government to bail him out, offering up his own private island as collateral against a loan.

Lottery Age to Go Up

The National Lottery itself hasn’t been free from reproach, as MPs drive to clamp down on the UK’s gambling industry. The issue of teenagers developing gambling problems has become apparent, particularly in connection with video game loot boxes. However, MPs are now also expected to raise the minimum legal age to play the National Lottery up from 16 to 18.

It is thought that this regulatory change will happen in 2023, when the new license period begins. The rule change would aim to stop 16 and 17 year olds from buying scratch cards and lottery tickets, and from playing online lottery games, which have been compared to slots. Clean Up Gambling has praised the idea, tweeting:

“This is very welcome. The younger you start gambling, the more likely you are to fall into addiction. There is a link between legal youth gambling and adult gambling problems. All gambling should be restricted to 18 and over.”

July’s ‘Gambling Harm – Time for Action’ report from the House of Lords Select Committee made the same suggestion, while calling for urgent action to combat gambling harms in Britain. It also recommended that the regulator review the lottery’s advertising and admin costs every year, and that gross profits tax should replace lottery.

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