UKGC Withholds Allwyn-Sberbank Legal Advice

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UKGC Cites Legal Privilege in Redacting Files

The UK Gambling Commission (UKGC) is withholding legal advice and other sensitive information related to National Lottery operator Allwyn and its owner's past links to the sanctioned Russian bank, Sberbank. A Freedom of Information (FOI) response published by the regulator on 7 May 2024 confirms it holds relevant documents but has supplied them in a heavily redacted format, citing legal professional privilege.

Context: Scrutiny of the National Lottery Operator

The request sought all correspondence, reports, and advice held by the Commission from 1 January 2021 onwards concerning links between Sberbank, Czech businessman Karel Komarek, his lottery company Allwyn, and the wider KKCG holding group he controls.

This period covers the critical final stages of the Fourth National Lottery Competition (4NLC), which saw Allwyn selected as the preferred applicant to take over the licence from Camelot. During the bidding process, Komarek's past business dealings, including a gas storage joint venture with Russia's Gazprom that was part-financed by Sberbank, came under intense scrutiny. This FOI request aimed to shed light on the regulator's knowledge and handling of these connections.

Details of the FOI Response

In its response, the UKGC confirmed it held information within the scope of the request and provided a 6.0 MB PDF file. However, it stated that significant portions of the material were redacted or withheld entirely based on two key exemptions:

• Section 40(2) - Personal Information: The names and email addresses of individuals were removed to protect personal data, a standard practice in FOI disclosures.
• Section 42 - Legal Professional Privilege (LPP): This more significant exemption was used to protect confidential legal advice. The UKGC stated that the withheld documents pertain to legal advice provided to its staff or shared with it by third parties (implied to be Allwyn/KKCG) on the basis of "common interest privilege."

The Commission conducted a public interest test, acknowledging the public's right to know that the 4NLC was run correctly. However, it concluded that the public interest in allowing its staff to receive "full and frank legal advice" without fear of disclosure was greater. The regulator argued that releasing the advice could hinder candid communications in the future, which would not be in the public interest.

Significance: Transparency vs. Confidentiality

The UKGC's response is significant for two reasons. Firstly, it confirms that discussions regarding Allwyn's links to Sberbank were substantive enough to require the commissioning and sharing of legal advice during the lottery licensing process.

Secondly, the decision to withhold this advice highlights the tension between regulatory transparency and the need for confidential counsel. While the UKGC ultimately approved Allwyn as a fit and proper operator, this partial disclosure prevents the public from fully scrutinising the due diligence undertaken. It leaves unanswered questions about the specific legal concerns that were raised and how the Commission weighed them when awarding the most lucrative public sector contract in the UK.